Townsville HHS Annual Report 2021-2022

ANNUAL REPORT

Information about consultancies, overseas travel, and the Queensland Language Services Policy is available at the Queensland Government Open Data website https://www.data.qld.gov.au. Townsville Hospital and Health Service had no expenditure on overseas travel to report on during 2021-2022.

An electronic copy of this report is available at www.townsville.health.qld. gov.au and www.health.qld.gov.au/townsville/about/annual-report.

Hard copies of the annual report are available by phoning the Public Affairs Manager on (07) 4433 1111. Alternatively, you can request a copy by emailing tsv-public-affairs@health.qld.gov.au.

The Queensland Government is committed to providing accessible services to Queenslanders from all culturally and linguistically diverse backgrounds. If you have difficulty in understanding the annual report, you can contact us on telephone (07) 4433 1111 and we will arrange an interpreter to effectively communicate the report to you.

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Content from this annual report should be attributed as: State of Queensland (Townsville Hospital and Health Service) Annual Report 2021-2022

© Townsville Hospital and Health Service 2022

2202-4972 (print)

2206-6330 (online)

Aboriginal and Torres Strait Islander people are advised that this publication may contain words, names, images and descriptions of people who have passed away.

Acknowledgement to Traditional Owners

The Townsville Hospital and Health Service respectfully acknowledges the traditional owners and custodians both past and present of the land and sea which we service and declares the Townsville Hospital and Health Service's commitment to reducing inequalities between Indigenous and non-Indigenous health outcomes in line with the Australian Government’s Closing the Gap initiative.

Recognition of Australian South Sea Islanders

Townsville Hospital and Health Service formally recognises the Australian South Sea Islanders as a distinct cultural group within our geographical boundaries. Townsville Hospital and Health Service is committed to fulfilling the Queensland Government Recognition Statement for Australian South Sea Islander Community to ensure that present and future generations of Australian South Sea Islanders have equality of opportunity to participate in and contribute to the economic, social, political and cultural life of the State.

Letter of Compliance

1 September 2022

The Honourable Yvette D'Ath MP Minister for Health and Ambulance Services

GPO Box 48 Brisbane QLD 4001

Dear Minister

I am pleased to submit for presentation to the Parliament the Annual Report 2021-2022 and financial statements for Townsville Hospital and Health Service.

I certify that this annual report complies with:

x the prescribed requirements of the Financial Accountability Act 2009 and the Financial and Performance Management Standard 2019; and x the detailed requirements set out in the Annual Report Requirements for Queensland Government agencies.

A checklist outlining the annual reporting requirements can be found on page 89 of this annual report.

Yours sincerely

Tony Mooney AM Chair

Townsville Hospital and Health Board

Queensland government objectives for the community

From the Board Chair

From the Health Service Chief Executive

us

Strategic direction

Vision, Purpose, Values

Priorities

Aboriginal and Torres Strait Islander Health

Our community-based and hospital-based services

and challenges

Our people

Board membership

Executive management

Organisational structure and workforce profile

Strategic workforce planning and performance

Early retirement, redundancy and retrenchment

Our risk management

Internal audit

External scrutiny, Information systems and recordkeeping

Public Service ethics and values

Human Rights

Confidential information

Non-financial performance

Service standards

summary

statements

checklist

Queensland Government objectives for the community

The Townsville Hospital and Health Service Strategic Plan 2018-2022 contributes, and is continuing to contribute, to the Queensland Government objectives for the community built around Unite and Recover – Queensland’s Economic Recovery Plan and specifically Safeguarding our health; Supporting jobs; Building Queensland; Growing our regions; Investing in Skills and Backing our frontline services.

Initiatives included:

x robust response to testing, vaccination, in-hospital and virtual care during the pandemic

x service continuity across the healthcare continuum

x capital projects that support and bolster local jobs

x workforce recruitment positioning the health service as an employer of choice

x investment in innovation in clinical practice

x support for training and organisational learning.

Message from the Board Chair

The year was dominated again by the COVID 19 pandemic and, as a key agency, the Townsville Hospital and Health Service (Townsville HHS) led the response in North Queensland, with other key stakeholders, while continuing to ensure that patients were seen in a timely manner. The unrelenting pressures presented by the pandemic have been handled with great professionalism and unsurpassed commitment by the 6,500-plus employees of the service.

During 2021-2022, the HHS delivered an extensive capital works program with strong support from the Queensland Government. Renal dialysis units were established in Charters Towers and Ingham, at a cost of more than $4 million, to support haemodialysis patients in their communities thereby reducing disruptive and costly travel to Townsville. The $10 million Adult Acute Mental Health Inpatient high-dependency unit redevelopment is taking shape at Townsville University Hospital (TUH) to support vulnerable consumers while the federally funded South Block upgrade will deliver 33 new beds to our growing community.

Innovation was an important focus during 2021-2022. The establishment of the first Interventional Neuroradiology Service outside south-east Queensland at TUH, to treat patients suffering stroke and aneurysm was an important achievement. For the first time in Queensland, we utilised the Virtual Outpatient Integration for Chronic Disease telehealth system to transition rural paediatric diabetes patients to adult care. Of special note, the HHS Clinical Trial Unit led the national effort to establish the national Teletrial Program to deliver clinical trials closer to home for rural, remote, and regional patients.

I was delighted to welcome the Minister for Health and Ambulance Services, the Honourable Yvette D’Ath, to TUH to

officially launch the new Paediatric Cardiology Service. This service is providing care to hundreds of North Queensland children with conditions including heart-rhythm disorders and rheumatic heart disease.

Consumer engagement is a critical priority of our health service. The Consumer Advisory Council, Aboriginal and Torres Strait Islander Community Advisory Council, regional Community Advisory Networks and numerous stakeholder forums provide clear evidence of this commitment. The creation of a Culturally and Linguistically Diverse (CALD) Action Plan has reinforced our agenda to ensure access to care is not compromised by language or cultural barriers. It was also very pleasing to see the launch of language badges where staff who speak languages other than English are available to support CALD patients and consumers.

As always, nothing is done in isolation, and I sincerely thank both my fellow Board members for their stellar support and Health Service Chief Executive (HSCE) Kieran Keyes and his team for their stewardship of the organisation during 20212022. I’d particularly like to thank outgoing Board member Chris Castles for his invaluable contribution during his time on the Board and Ted Winterbottom for his significant service to the Board Safety and Quality Committee. Ted is a consumer who was appointed to the committee in 2014

Lastly, and most importantly, thank you to the individuals, families, and communities of our diverse catchment. Everything is about you, and for you, and I look forward to our health service continuing to provide the best possible care in the year ahead.

Tony Mooney AM

Chair, Townsville Hospital and Health Board

Message from the Health Service Chief Executive

The past 12 months have again been dominated by the global pandemic of COVID-19. The work of the Townsville HHS in ensuring local communities were as protected as they could be from the devastating effects of this virus has been a singular driving focus. The staff of the HHS - both clinical and non-clinical - have been fearless and dedicated and met front on the extra challenges associated with the rural and remote nature of many of our communities.

The COVID-19 response on Palm Island earned a berth at the Queensland Health Clinical Excellence Showcase as a textbook example of a collaborative and culturally led response to a human health crisis. In the midst of responding to the pandemic, the HHS also dedicated itself to achieving its strategic agenda to be a leader in healthcare, research, and education, and to improve the health of the people and communities of Northern Queensland.

In 2021-2022, innovation, continuous improvement, and best practice were again in focus. The North Queensland Kidney Transplant Service, which will treat patients from communities from Mackay to the tip of Cape York, is taking shape driven by a commitment to equity and access for North Queenslanders with end-stage renal failure.

Equipment enhancement and capital improvement were also high on the list of HHS priorities in 2021-2022. A $6.75 million pharmaceutical manufacturing unit, producing more than 5,000 medications each year, opened at TUH allowing the most unwell North Queenslanders to be cared for locally. The unit played a critical role in the fight against COVID-19 with a dedicated team producing life-saving medications on site. The delivery of new equipment including the milliondollar Med-tronic O-arm has meant patients now have access to cutting-edge technology locally.

The Townsville HHS’s ICARE values - Integrity, Compassion, Accountability, Respect and Engagement - continued to guide professional practice both clinically and in interactions with stakeholders, colleagues, and peers. The HHS’s reward and recognition framework shone a spotlight on excellence and on living the organisational values with the Staff Excellence Awards, NAIDOC Week awards, and nursing, allied health, and medical awards all celebrated throughout the year. Engagement with stakeholders and partner agencies continued to help build our strategic agenda.

TUH proudly remains the principal teaching hospital for James Cook University’s schools and colleges of medicine, nursing, dentistry, allied, and health sciences. Engagement with consumers and community remains strong with users of HHS services actively involved in the design of infrastructure and models of care.

The successes this year were achieved, as most successes are, through collaboration and a shared vision. Thank you to the Executive team for its support over 2021-2022 and to Board Chair Tony Mooney and his Board for their continued strong support for delivering on the HHS’s strategic agenda.

My sincerest thanks are reserved for our 6,500-plus workforce. You are the backbone of our organisation and your compassion, skill, and commitment assure the health, wellness, and care of the people and communities of our region.

Professor Kieran Keyes

Health Service Chief Executive, Townsville Hospital and Health Service

ABOUT US

Established on 1 July 2012, the Townsville HHS is an independent statutory body overseen by a local Hospital and Health Board under the Hospital and Health Boards Act 2011 (Qld)

The Townsville HHS covers a geographic expanse extending north to Cardwell, west to Richmond, south to Home Hill, and east to Magnetic and Palm Islands. As northern Australia’s only tertiary-level health service, the health service delivers healthcare to an extensive catchment stretching from Mackay in the south, north to the Torres Strait Islands, and west to the Northern Territory border. More than nine per cent of the Townsville HHS’s resident

Strategic direction

The organisation’s strategic direction is set by the Townsville Hospital and Health Board. The Plan’s four pillars: provide high-quality, person-centred care for northern Queensland; ensure efficient and sustainable stewardship of resources; work collaboratively, embrace innovation and continuously improve; maintain an exceptional workforce and be a great place to work, are the bedrock of the organisation’s business and guide our practice and future direction.

Priorities

The Townsville HHS is committed to supporting the health needs of North Queenslanders through prioritised strategic actions including:

x strengthening the tertiary referral role of TUH to ensure equitable access to high-quality, specialised, and sustainable health services closer to home

x establishing our organisation as leaders in health research and innovation for regional Australia

x enhancing partnership arrangements with patients, communities, staff, and service-delivery organisations both locally and across the region

x working closely with Aboriginal and Torres Strait Islander staff, patients, communities, and organisations to improve the cultural capability of our services

x fostering a workplace culture that values, supports, and develops our workforce.

population are of Aboriginal and Torres Strait Islander descent, almost double the Queensland average (4.7 per cent). Around 13 per cent of the resident population was born outside Australia and seven per cent speak a language other than English at home.

The Townsville Hospital and Health Service Strategic Plan 2018-2022 (the Plan) outlines our strategic agenda and future direction to 2022

Vision, purpose and values

Vision

To be the leader in healthcare, research and education for regional Australia.

Purpose

To deliver excellent care, research and education to improve the health of the people and communities of northern Queensland.

Values

The Townsville HHS’s values underpin, and are consistent with, the Queensland Public Service values of customers first, ideas into action, unleash potential, be courageous and empower people.

x Integrity

Compassion

Accountability

Respect x Engagement.

Aboriginal and Torres Strait Islander Health

The Townsville HHS works collaboratively with community and partners to achieve health equity for Aboriginal peoples and Torres Strait Islander peoples, and to co-design and implement health and wellbeing initiatives that Close the Gap in health outcomes.

The Townsville Hospital and Health Service First Nations Health Equity Strategy is currently being co-designed by prescribed stakeholders including community, Traditional Owners and Custodians, health service providers, community-based and controlled organisations, and other key stakeholders.

Key achievements for 2021-2022

x developed an inaugural Aboriginal and Torres Strait Islander Workforce Strategy 2022-2031 to increase First Nations workforce representation to levels commensurate with the local population

x championed key consultative opportunities and forums through the ongoing work of the Aboriginal and Torres Strait Islander Community Advisory Council and the Aboriginal and Torres Strait Islander Health Leadership Advisory Council

x transitioned the Palm Island Primary Healthcare Centre to the community-controlled entity, Palm Island Community Company

x delivered a Cultural Practice Program that fostered culturally appropriate behaviour by enhancing staff members’ understanding of local Aboriginal peoples' and Torres Strait Islander peoples’ history and culture

x developed a connected-to-community model of care which delivers the Midwifery Community Access Program to First Nations families

x activated collaborative primary care partnerships providing community-wide COVID-19 vaccinations

x delivered the Aboriginal and Torres Strait Islander Wellbeing Assessment and Engagement Service to streamline the delivery of culturally appropriate mental health services to Aboriginal and Torres Strait Islander consumers

x delivered the PROV-ED project focussed on creating and improving awareness of cultural safety in TUH’s emergency department

x created the Townsville and Surrounds Aboriginal and Torres Strait Islander COVID-19 Vaccination Working Group specifically to support First Nations vaccination

x trained First Nations health workers to administer COVID-19 vaccinations and removed barriers to the vaccination booking system optimising access and opportunity

x enhanced the vaccination experience for Aboriginal peoples and Torres Strait Islander peoples by providing culturally safe spaces at vaccination clinics

x designed and installed Acknowledgement to Country plaques at the entrances to all facilities

x undertook a curatorial program to install bespoke First Nations art in TUH to enhance the cultural safety and welcomeness of the built environment.

Richmond Health Service

Richmond Health Service provides 24-hour accident and emergency care, inpatient and general medical services.

Hughenden Multipurpose Health Service

Hughenden Multipurpose Health Service provides 24-hour accident and emergency care, inpatient and general medical services.

Our community-based and hospital-based services

The Townsville Hospital and Health Service comprises 21 facilities across its catchment: 19 hospitals and community health campuses and two residential aged care facilities.

The Townsville HHS offers car parking concessions to eligible patients, carers, immediate family members, and volunteers at TUH. There were 1,912 concessional car parking applications approved in 2021-2022 valued at $66,995

Ingham Health Service

Ingham Health Service provides accident and emergency care, inpatient and general surgery services.

Joyce Palmer Health Service

The Joyce Palmer Health Service provides emergency services and acute care to the Palm Island community.

Townsville University Hospital

Townsville University Hospital is the only tertiary referral hospital in North Queensland and provides the latest in cardiac, obstetric, gynaecological, paediatric, neurosurgical, orthopaedic, cancer care, mental health, neonatal, allied health, and intensive care services.

Home Hill Health Service

Charters Towers Health Service

Charters Towers Health Service provides accident and emergency care, inpatient and outreach services.

Home Hill Health Service provides aged care, rehabilitation and renal dialysis services to the local community.

Ayr Health Service

Ayr Health Service provides general medical, surgical and obstetric services to Ayr, Home Hill and the broader Burdekin Shire.

Targets and challenges

In meeting the evolving health needs of the North Queensland region, the HHS will face a variety of risks to the delivery of services. These risks have the potential to impact upon all four strategic pillars and are driven primarily by:

x population growth and ageing

x increased prevalence of chronic disease

x industry-wide competition for resources, both human and capital.

Recent months have forced a significant change to operations in the Townsville HHS in the face of the global COVID-19 pandemic.

Staff in the HHS contributed to the COVID-19 pandemic response in a range of ways including:

x establishing nurse-led COVID-19 assessment clinics to support testing for the local community

x establishing a stand-alone COVID-19 vaccination centre in the community

x establishing pop-up vaccination and testing clinics and flexing up and down contingent on demand

x rolling out vaccinations to rural communities in the HHS including Palm Island

x creating a bespoke vaccination information campaign for First Nations peoples

x sponsoring events leveraging access to vaccination and campaign messaging

x designing materials for use across the HHS to promote changes to visiting hours, social distancing and mask wearing

x designing vaccination materials targeted to children

x ensuring point-in-time COVID-19 messaging on the HHS social media platforms and external website.

Our People Board membership

Tony Mooney AM Board Chair

Appointed: May 2016

Tony Mooney is the Chair of the Townsville Hospital and Health Board (commencing in May 2016) and Board Executive Committee. Tony is a Member of the Board Audit and Risk Committee, Board Finance Committee, Board Safety and Quality Committee, and Board Stakeholder Engagement Committee.

Tony is the Chair of Queensland Government’s Resources Community Infrastructure Fund Advisory Committee and holds Director positions at Tropical Australian Academic Health Centre and North Queensland Bulk Ports. He is also a member of the Upper Burdekin Irrigation Project Reference Panel. Previously, Tony was a Councillor and Deputy Mayor of the Townsville City Council and was elected Mayor in 1989. He held the position of Mayor of Townsville until 2008. In 2008, Tony was made a Fellow of the Australian Institute of Company Directors. In 2011, Tony was awarded an Order of Australia (AM) for services to local government and the community.

Tony previously served on the boards of numerous government and community entities, including Ergon Energy, LG Super, Townsville Entertainment Centre Board of Management (Chair) until 2008, and as the inaugural Chair of the Willows Stadium Joint Board (currently 1300SMILES Stadium). In 2011, Tony was appointed by the Federal Government to the Board of the Great Barrier Reef Marine Park Authority where he served until 2016

Michelle Morton

Deputy Chair

Appointed: June 2012

Michelle Morton is Deputy Board Chair, Chair of the Board Finance Committee, Deputy Chair of the Board Executive Committee and Member of the Board Audit and Risk Committee. Michelle has held the position of Queensland Health’s Finance and Audit Committee Chair since 2018.

Michelle has extensive experience in the administration of hospital services, financial management and organisation as well as risk management, regulatory compliance, corporate and public-sector governance.

Michelle is a Managing Partner of a law firm and holds several Board positions including Member of the Racing Queensland Thoroughbred Advisory Committee. Michelle is a Fellow of the Australian Institute of Company Directors and a Queensland Law Society Accredited Specialist in Workplace Relations and Personal Injuries.

Debra Burden Board member

Appointed: May 2016

Debra Burden, a degree-qualified accountant, is the Chief Executive Officer of selectability and selectability Training. Debra has previously held CEO and executive management positions with Queensland Country Credit Union and Health Fund, Australian Securities Exchange-listed dental services company 1300SMILES and Canegrowers Burdekin. Debra has previously been recognised by Queensland Business Review and Queensland Telstra Businesswomen’s Industry Awards.

Debra, a Fellow of both the Australian Institute of Company Directors (AICD) and the Institute of Leaders and Managers, has extensive board-level experience having successfully completed the AICD course twice and held board positions in numerous companies as Chair, Deputy Chair, Treasurer, Chair of Audit and Risk Committee and Company Secretary. Recent previous Board positions include Deputy Chair of North and West Remote Health, North Queensland Primary Health Network and Tooth Booth Ltd.

Debra is the current Chair of the Board Audit and Risk Committee and a member of the Board Executive Committee and Board Finance Committee.

Chris Castles

Board member

Appointed: May 2016

Chris Castles is the Managing Director of Coscer Partners Pty Ltd, an integrated financial services business with accounting and financial planning offices in Innisfail, Ingham, Townsville and Brisbane. Chris is a Certified Practising Accountant, Certified Financial Planner, and Fellow of the Australian Institute of Company Directors. Following his service in the Royal Australian Air Force, Chris served as director and committee member for both listed and unlisted public companies involving international and domestic operations and spanning financial services, funds management, health, and agribusiness.

During his tenure on the Board, Chris served as Deputy Chair of the Finance Committee and was a member of both the Board Safety and Quality Committee and Board Stakeholder Engagement Committee. Chris did not seek reappointment in March 2022

Luke Guazzo

Board member

Appointed: April 2022

Luke Guazzo is the newest member of the Board, appointed in April 2022. No stranger to the Townsville Hospital and Health Service having previously served on the Board’s Audit and Risk Committee from 2018 to 2021.

Luke brings with him broad business and governance experience accrued in his 20-year career in North Queensland across a wide variety of industries.

Luke is the Chief Executive Officer of Northern Australia Primary Health Limited and holds committee positions on various not-for-profit and commercial sector boards. Luke, born in Ingham, is raising a young family in Townsville and remains a strong advocate for ensuring health equity across our region.

Luke graduated from James Cook University (B.Com Accounting) and completed his CPA through Deakin University. Numerous industry awards have acknowledged his professional authority in the fields of business, strategy and leadership.

Nicole Hayes

Board member

Appointed: May 2019

Nicole Hayes is currently the Chief Executive Officer of Northern Queensland Legacy. Her previous health-related roles include managing the Department of Education and Training’s Hospital School, based in the TUH Children's Ward.

Nicole also ran the Ronald McDonald House Charities’ education program in northern Queensland.

Nicole has successfully project managed initiatives to support at-risk and disadvantaged youth, with a focus on Indigenous engagement including a major youth suicide prevention pilot project for Queensland Health and Education Queensland. She previously led the Federal Government-funded Higher Education Participation and Partnership Program for James Cook University, boosting university participation for young people from disadvantaged backgrounds and was the Marketing and Business Development leader for AECOM across northern Queensland and the Northern Territory.

Nicole is a Graduate of the Australian Institute of Company Directors and holds a Bachelor of Education, Master of Business Administration (MBA), and has completed the International Association for Public Participation (IAP2) Certificate of Engagement.

Nicole joined the Townsville Hospital and Health Board in 2019 and is the Deputy Chair of the Board’s Stakeholder Engagement Committee.

Danette (Danni) Hocking

Board member

Appointed: May 2019

Danni Hocking currently works with the Department of Education QLD in enhancing the culture, wellbeing and psychological health of staff across NQ. Danni is a senior occupational therapist with over 20 years’ experience across a range of domains including aged/disability care, mental health, drug and alcohol, corporate health, and public/community health.

Danni has extensive knowledge of the disability sector and working within the National Disability Insurance Scheme (NDIS) with broad experience in managing Aboriginal and Torres Strait Islander health programs and peoplerisk issues including the development of award-winning corporate safety and wellness programs. An experienced provider of safety/risk consulting and training services to industry for more than 15 years, Danni is considered a thought leader on health, safety and wellness and is a wellregarded speaker at national and international safety and wellbeing forums.

Danni holds a Bachelor of Science in Occupational Therapy and has post-graduate qualifications in wellness, safety and risk management and business administration. Danni is a graduate of the Australian Institute of Company Directors.

Danni joined the Townsville Hospital and Health Board in 2019 and is the Deputy Chair of the Audit and Risk Committee.

Professor Ajay Rane OAM PSM Board member

Appointed: May 2017

Professor Ajay Rane is the Director of Urogynaecology at TUH, Director of Mater Pelvic Health and Research and Head of Obstetrics and Gynaecology at James Cook University (JCU). Professor Rane holds a Bachelor of Medicine and Bachelor of Surgery from the University of Poona and a PhD from JCU.

Professor Rane was a finalist for Australian of the Year in 2012 and was awarded the Order of Australia (OAM) in 2013. In 2021, he was named a Queensland Great for his work both locally and across the developing world as a champion for women’s reproductive rights and for the care of women with urinary incontinence and pelvic dysfunction.

Professor Rane has spent two decades treating and operating on women with catastrophic childbirth injuries in some of the world’s poorest countries. In 2016, he received the Mahatma Gandhi Pravasi Award for Humanitarian Work in Women’s Health.

Professor Rane is the current Chair of the Fistula Committee for the International Federation of Obstetricians and Gynaecologists and is leading the charge for fistula education and prevention in the developing world. In May 2020, Professor Rane received an honorary fellowship from the American College of Obstetricians and Gynaecologists for his work in advancing women’s health.

Donald Whaleboat Board member

Appointed: July 2012

Donald Whaleboat is a senior lecturer at the College of Medicine and Dentistry and Associate Dean at Indigenous Health, Division of Tropical Health and Medicine, James Cook University.

Donald’s experience in Aboriginal and Torres Strait Islander primary healthcare, health promotion and health workforce development spans nearly three decades.

Donald has served as a member of the Board since 2012 and is the Chair of the Board Stakeholder Engagement Committee and Deputy Chair of the Safety and Quality Committee.

Donald was a Board member of the Townsville Aboriginal and Torres Strait Islander Corporation for Health Services for seven years and Chairperson for five years. During this time, he led the development of strong corporate governance, quality improvement and consumer engagement for the organisation. Donald’s commitment to health also led to his appointment to the Board of Northern Australia Primary Health Limited in 2018. Donald is a graduate of Australian Institute of Company Directors and holds a Master of Public Health.

Georgina Whelan Board member

Appointed: May 2020

Georgina Whelan is Site Manager at Townsville’s Icon Cancer Centre. A registered nurse with over 27 years’ experience in the health industry across both public and private health sectors, Georgina has experience across a range of medical and surgical specialties with a passion and commitment to the specialty of oncology where she has dedicated the last two decades of her career.

Georgina has a demonstrated passion and drive for regional cancer care by ensuring patients have equitable access and exceptional standards of care. She has successfully commissioned and established cancer day hospitals in both Townsville and Mackay.

Georgina completed a Bachelor of Nursing at the University of South Australia in 1995 and started her nursing career at the Royal Adelaide Hospital. Georgina later relocated to Townsville and worked as a registered nurse at the TUH oncology unit before being appointed as clinical nurse in the Oncology Day Unit.

Georgina moved into the role of Site Manager at Icon Cancer Centre in 2013, where she has developed exceptional leadership and business management attributes. Georgina holds a Master of Business Administration and is a Graduate of the Australian Institute of Company Directors. She also holds an Advisory Board position for an international organisation developing an integrated oncology software solution.

Georgina is a member of the Board Finance, Board Audit and Risk and Board Stakeholder and Engagement Committees.

Non-Board members of committees

During 2021-2022 the Board was expertly assisted by the following non-Board Members:

x Board Audit and Risk Committee - Associate Professor Luke Lawton and Mrs Alison Scott

x Board Safety and Quality Committee - Dr Kunwarjit Sangla, Mr Edward Winterbottom, Mr Adriel Burley and Dr Sarah Wilkinson

x Board Finance Committee - Ms Patricia Brand.

The Board would like to acknowledge the contribution of Mr Edward ‘Ted’ Winterbottom who has been a valued member of the Board Safety and Quality Committee since 2012. Ted retired from his non-Board member role in July 2022

During the year, the Board held 10 ordinary meetings and one extraordinary meeting. The table shows the attendance record of the number of meetings Board members were eligible to attend. The Board also attended two full-day strategic workshops with the Senior Leadership team and Townsville HHS stakeholders on 1 November 2021 and 16 May 2022

In total, $8,948.57 in out-of-pocket expenses were paid to Board members during the reporting period. Further details on the Board remuneration is provided in Appendix 1

Number of meetings held 11 12 6 12 6 6

Name Position Current Term

Tony Mooney AM Chair and member (18/05/2016)

Michelle Morton Deputy Chair and member (29/06/2012)

Debra Burden Member (18/05/2016)

Christopher Castles Member (18/05/2016)

Luke Guazzo Member (01/04/2022)

Nicole Hayes Member (18/05/2019)

Danette Hocking Member (18/05/2019)

Professor Ajay Rane OAM PSM** Member (18/05/2017)

Robert ‘Donald’ Whaleboat Member (27/07/2012)

Georgina Whelan Member (18/05/2020)

18/05/2020 to 31/03/2024

10/06/2021 to 31/03/2024

18/05/2020 to 31/03/2024

18/05/2019 to 31/03/2022

10 of 11* 10 of 12 6 of 6 11 of 12* 4 of 6 4 of 6

11 of 11 12 of 12* 6 of 6 11 of 12 N/A N/A

11 of 11 12 of 12 6 of 6* 12 of 12 N/A N/A

7 of 7 9 of 9 N/A N/A N/A N/A

01/04/2022 to 31/03/2026 3 of 3 3 of 3 N/A N/A N/A 2 of 2

18/05/2020 to 31/03/2024 11 of 11 N/A N/A N/A 6 of 6 5 of 6

1/04/2022 to 31/03/2026 10 of 11 N/A 5 of 6 N/A 5 of 6 N/A

18/05/2020 to 31/03/2024 8 of 11 N/A N/A 11 of 12 4 of 6 5 of 6*

01/04/2022 to 31/03/2024 10 of 11 N/A N/A 11 of 12 5 of 6* 6 of 6

18/05/2020 to 31/03/2024 11 of 11 12 of 12 6 of 6 N/A 1 of 1 N/A

Board

Finance Committee Audit and Risk

Executive Committee Stakeholder Engagement Committee

Safety and

Board committees

Five of the Board committees are prescribed, while the Board Stakeholder Engagement Committee is a nonprescribed committee.

Executive

The Executive Committee works with the Health Service Chief Executive to oversee the development and implementation of the strategic plan and progression of strategic issues, including those identified by the Board.

The committee strengthens the Board’s relationship with the Health Service Chief Executive, promoting accountability in the delivery of services by the Townsville HHS and supporting its response to all critical and emergent issues.

Safety and Quality

The Safety and Quality Committee provides strategic clinical governance leadership by advising the Board on matters relating to delivery of safe, quality care across the organisation.

The committee oversees the HHS’s safety and quality healthcare governance arrangements and compliance with relevant plans and strategies while monitoring the safety and quality of care provided. The committee also collaborates with other safety and quality committees to promote improvement and innovation within the Townsville HHS.

Finance

The role of the Finance Committee is to oversee the financial performance, systems, risk and requirements of the health service.

The committee advises the Board on matters relating to financial performance and the monitoring of financial systems, financial strategy and policies, capital expenditure, cash flow, revenue, and budgeting, to ensure alignment with key strategic priorities and performance objectives.

Audit and Risk

The Audit and Risk Committee provides independent oversight of the internal and external audit function, providing the Board with advice and recommendations on matters relating to risk and compliance for financial, accounting, and legislative requirements.

The committee delivers its function in alignment with internal risk and compliance frameworks and external responsibilities as prescribed in the Financial Accountability Act 2009, Auditor-General Act 2009, Financial Accountability Regulation 2009 and Financial and Performance Management Standard 2019. The committee considers all performance reporting and insights released by the Queensland Audit Office to enhance its effectiveness.

The committee recruited two new independent members throughout the year, after a review of its skills matrix. As part of these appointments, the committee has increased the breadth and depth of expertise in health service provision, as well as its medical expertise.

The committee considered the strategic intent of the organisation’s enterprise risk management framework and, along with management, articulated a new desired future state for the framework designed to guide and support business intelligent risk-based decision-making. The committee considered and approved a roadmap for management to achieve this over the next 12 months. The committee oversaw several internal audits in 20212022, focusing on the organisation’s risk profile with audit topics focused on assurance (value protection), and an increasing provision for advisory topics (value enhancement).

Stakeholder Engagement

The Stakeholder Engagement Committee is a nonprescribed committee established to monitor and promote the service’s reputation by ensuring there is clear and meaningful communication and engagement with staff, community, and other stakeholders.

The committee oversees the implementation activities relating to two key engagement strategies: Clinician Engagement Strategy and the Consumer and Community Engagement Strategy. The committee also acts as the pathway committee for three consumer and clinician advisory councils to the Board.

Executive management

The Townsville HHS executive was led in 2021-2022 by Health Service Chief Executive (HSCE) Kieran Keyes. The HSCE is responsible and accountable for the day-today management of the HHS and for operationalising the Board’s strategic vision and direction. The HSCE is appointed by, and reports to, the Board.

The HSCE was supported by an executive team comprised of:

x Chief Operating Officer Stephen Eaton

x Chief Medical Officer Dr Niall Small

x Chief Finance Officers Mr Matthew Rooney, Mr Malcolm Wilson, and Mr Anthony Mathas

x Executive Director Nursing and Midwifery Services Ms Judy Morton

x Executive Director Clinical Governance Marina Daly

x Executive Director Human Resources Ms Sharon Kelly (acting)

x Executive Director Aboriginal and Torres Strait Islander Health Ms Wendy Ah Chin

x Executive Director Digital Health and Knowledge Management Ms Louise Hayes

x Executive Director Allied Health Ms Danielle Hornsby

x Executive Director Corporate and Strategic Governance Ms Sharon Kelly.

The business of the HHS is operationalised through five clinical service groups: Health and Wellbeing, Medical, Mental Health, Rural Hospitals, and Surgical, two clinical services divisions, Allied Health Service Division and Indigenous Health Service Division, and one non-clinical directorate, Facilities, Infrastructure and Support Services. The service groups, directorates and divisions are supported by a corporate services function. The Townsville Public Health Unit (TPHU) is responsible for population health, disease prevention and health promotion.

Organisational structure and workforce profile

At

June 2022,

Minister

Table 1 : More doctors, nurses and allied health practitioners *

2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

Medical staffa 693 720 729 764 768

Nursing staffa 2,268 2,310 2,355 2,419 2,429 Allied Health staffa 646 661 678 833 831

Note: * Workforce is measured in MOHRI - Full-Time Equivalent (FTE). Data presented reflects the most recent pay cycle at year’s end. Data presented reflects the most recent pay cycle at year's end, period ending 26 June 2022.

Source: aDSS Employee Analysis

Table 2 : Target group data

Gender

Number (Headcount) Percentage of total workforce (Calculated on headcount)

Woman 5,218 77.1

Man 1,530 22.6

Non-binary 18 0.3

Diversity Groups Number (Headcount) Percentage of total workforce (Calculated on headcount)

Women 5,218 77.1

Aboriginal Peoples and Torres Strait Islander Peoples 244 3.6 People with disability 151 2.2

Culturally and Linguistically Diverse – Born overseas 91 1.3

Culturally and Linguistically Diverse – Speak a language at home other than English (including Aboriginal and Torres Strait Islander languages or Australian South Sea Islander languages) 788 11.6

Number (Headcount)

Percentage of total Leadership Cohort (Calculated on headcount)

Women in Leadership Roles1 19 76

1Women in Leadership Roles are considered those positions that are Senior Officer and equivalent and above.

Strategic workforce planning and performance

During 2021-2022, the Townsville HHS commenced a concerted focus on organisational workplace culture. This has included engagement with our workforce on aligning our behaviours to our ICARE (Integrity, Compassion, Accountability, Respect, Engagement) values at all levels.

To support embedding Values In Action into our ‘ways of working’, the Performance Assessment and Development (PAD) template was redesigned to encourage and enable more valuable and productive conversations between line managers and their team members and to support the organisation to foster a values-based culture.

The Townsville HHS also progressed an education strategy to maximise multi-disciplinary learning within the organisation and focus on developing the relationship between the health service and our teaching and learning partners.

Diverse workforce

x A Diversity and inclusion action plan has been developed following extensive consultation with diversity target groups.

x Townsville HHS diversity targets groups are: people with disability, people from a non-English speaking background, Aboriginal and Torres Strait Islander Peoples, gender equity, LGBTIQ+ people, under 25s, over 45s, female senior medical leadership.

Leadership skills

x Townsville HHS has applied the Leadership Pipeline methodology to clearly articulate the scope and focus of leadership at every level of the organisation.

x Leadership development programmes have been designed to align to this and are available to all levels of leadership.

Health, Safety and Wellness

Townsville HHS is committed to workplace safety, and management of employee health and wellbeing in line with the Work Health and Safety Act 2011 and the requirements of the Workers' Compensation and Rehabilitation Act 2003

The Townsville HHS Work Health and Safety Governance Committee provides ongoing oversight of the effectiveness of the Safety Management System and assurance activities across the health service.

Aligned to our strategic objective to support staff to achieve good health and a sense of wellbeing, in 2021-2022 the HHS: x established a Staff Wellbeing Psychologist role to lead development and implementation of an employee mental health and wellbeing program

x established a dedicated Occupational Violence Specialist to role to implement a number of initiatives being rolled out across the state, as well as analyse local occupational violence information, and investigate incidents to make recommendations on ways to reduce the frequency and impact of violence and aggression in the workplace

x commenced a focussed program of work to develop and implement systems, processes, tools and strategies to support identification, assessment, reporting and management of staff fatigue.

In response to COVID-19, Townsville HHS: x established a staff wellbeing network specifically designed to support those staff directly affected by COVID, supporting relatives with COVID, or experiencing the impact of isolation.

Aboriginal and Torres Strait Islander Workforce Strategy

The Townsville HHS has developed an inaugural Aboriginal and Torres Strait Islander Workforce Strategy 2022-2031 to increase First Nations’ workforce representation to levels commensurate with local population.

The Cultural Practice Program delivered to employees is aimed at fostering culturally appropriate behaviour at Townsville HHS by enhancing staff members’ understanding of local Aboriginal and Torres Strait Islander peoples’ history and culture. Tracking towards the required 80 per cent staff completion rate (over a five-year rolling projection), the program continues to assist staff in developing culturally responsive communication skills and providing safer health journeys for Aboriginal and Torres Strait Islander people, patients, and consumers.

Union engagement

The Townsville HHS encourages and promotes union engagement to act as an advocate and also assist resolve workplace issues to achieve desired outcomes for employees.

Townsville HHS regularly holds and engages with various unions at the local consultative forums – HSCF, ALCF, OLCF, AHDCF and others. The joint consultation meetings operate within the Queensland Industrial Relations legislation framework which provides a mechanism for open and transparent engagement on relevant matters including significant change and workplace reform before decisions are made. Forums are also a way for the parties to solve disputes and problems jointly.

Early retirement, redundancy and retrenchment

No redundancy, early retirement or retrenchment packages were paid during the reporting period.

Our risk management

The Hospital and Health Boards Act 2011 requires annual reports to state each direction given by the Minister to the HHS during the financial year and the action taken by the HHS as a result of the direction. During the 2021-2022 period, no directions were given by the Minister to the Townsville Hospital and Health Service.

Internal audit

Internal audit is a fundamental tenet in the governance and assurance environment of the Townsville HHS and is a valuable tool to manage risk effectively.

The HHS’s internal audit function was established by the Townsville Hospital and Health Board in accordance with the Finance and Performance Management Standard 2019

The key objective of the internal audit function is to support the health service achieve its strategic objectives through the provision of objective assurance and advice on systems of governance, risk management, and internal control.

The Townsville HHS’s internal audit services are provided through a co-source service delivery model, led and managed by the Director Internal Audit. The Director Internal Audit is responsible for the effective, efficient, and economical operation of the internal audit function and reports key audit results and program deliverables to the Board Audit and Risk Committee bi-monthly. Overall strategy, performance and effectiveness of the function is reviewed in consultation with the Board Audit and Risk Committee and reported on annually.

The purpose and accountabilities of the internal audit function are underpinned by an operational plan which describes the design and scope of future work to be undertaken by the internal audit team. The plan is developed through a robust planning and consultation process and remains flexible and adaptive to respond to emerging needs and the changing risk profile of the organisation.

Eight reviews were performed in 2021-2022 resulting in significant business improvement opportunities and internal control enhancements across key aspects of the health service including:

x senior leadership orientation and onboarding

radiology services

information security

telehealth services

occupational violence

clinical handover

offender health

partnering with consumers.

External scrutiny, Information systems and recordkeeping

External scrutiny

Internal and external reviews are often commissioned by government agencies and/or state bodies to provide independent assurance regarding the operations and performance of the business. Therefore, the Health Service’s activities and operations are subject to regular scrutiny from external oversight agencies.

Aged Care Standards

Townsville HHS have two residential aged care facilities, Eventide Charters Towers and Parklands Townsville, assessed by the Australian Aged Care Quality Agency for compliance with Accreditation Standards set out in the Quality-of-Care Principles 2014 made under section 96-1 of the Aged Care Act 1997. Both facilities are currently accredited. Both announced and unannounced assessments were conducted at both residential aged care facilities in the 2021-2022 year.

National Safety and Quality Health Service Standards

All Townsville Hospital and Health services are currently accredited by the Australian Council on Healthcare Standards (ACHS). In 2021-2022, the Health Service underwent an Accreditation assessment by ACHS against the National Safety and Quality Health Service Standards Second Edition with an outcome of three years accreditation being awarded valid until 26 March 2026. This included an assessment against the new MultiPurpose Services Aged Care Module Standards that apply to two health facilities (Richmond and Hughenden).

Coronial reports

The HHS did not receive any recommendations from coronial investigations in the 2021-2022 financial year.

Parliamentary Reporting

In the 2021-2022 financial year, Parliamentary reports tabled by the Auditor-General which considered or evaluated the performance of Townsville Hospital and Health Service included:

x Report to Parliament 12: Health 2021

x Report to Parliament 8: Improving access to specialist outpatient services

x Report to Parliament 2: Measuring emergency department wait time.

The HHS considered the findings and recommendations contained in these reports and, where required, has taken action to implement the recommendations or address issues raised.

Information systems and recordkeeping

Townsville HHS has continued to mature their digital technology capabilities and use for better records management, care of patients and efficient operation of the facilities and teams.

All staff are orientated to good recordkeeping practices in all information system training sessions. Management of records aligns to the Health Sector (Clinical Records) Retention and Disposal Schedule (QDAN 683) and the General Retention and Disposal Schedule (QDAN 249). Information privacy awareness has been a focus area with the HHS partaking in a number of privacy awareness activities during Information Privacy Week and improving our communication and updates for staff throughout the year.

Information security attestation

During the 2021-2022 financial year, the Townsville HHS have an informed opinion that information security risks were actively managed and assessed against the Townsville HHS’s risk appetite with appropriate assurance activities undertaken in line with the requirements of the Queensland Government Enterprise Architecture (QGEA) Information security policy (IS18:2018).

Queensland Public Service ethics and values

As part of the Townsville HHS orientation program, all staff are provided with the Code of Conduct of the Queensland Public Sector.

Human Rights

The Human Rights Act 2019 took effect from 1 January 2020 and, as a public entity, the Townsville HHS must act and make decisions compatible with the 23 human rights protected under the legislation.

To ensure that human rights are respected, policies and procedures are reviewed for their compatibility with human rights, with each new policy and procedure assessed for the potential to impact on human rights. A comprehensive training package for all levels of staff in the organisation has been developed and training is ongoing.

To promote human rights to consumers, the health service developed an information poster for display in waiting and ward areas. Additional information about human rights has been added to the organisation’s public-facing website, and training about human rights, tailored to consumer representatives, has been implemented.

The Townsville Hospital and Health Service has reviewed its consumer feedback processes to ensure that the course of making a complaint to the health service about a human rights concern is easy and accessible for all consumers, visitors, and staff.

In 2012-2022, the health service received 30 human rights complaints. Each complaint was investigated and responded to and, where required, practices were adapted and improved to ensure the actions and decisions of staff were compatible with human rights.

Confidential information

The Hospital and Health Boards Act 2011 requires annual reports to state the nature and purpose of any confidential information disclosed in the public interest during the financial year. The HSCE did not authorise the disclosure of confidential information during the reporting period.

PERFORMANCE

HHS performance is monitored and reported against several key foundations; performance against strategic plan measures, performance against service standards reflected in the service delivery statements, and financial performance.

Non-financial performance

The HHS monitors its progress against the measures outlined in the Townsville Hospital and Health Service Strategic Plan 2018-2022. Progress in 2021-2022 aligned to the strategic plan pillars includes:

PILLAR 1 - Provide high-quality, person-centred care for northern Queensland

Compliance with National Quality and Safety Standards

x Townsville HHS received formal notification from the Australian Council on Healthcare Standards (ACHS) on 25 February 2022 advising that three years accreditation had been awarded, valid until 26 March 2026.

x Both residential aged care facilities were re-accredited for a further three years during the reporting period.

Service self-sufficiency

Positive engagement with Townsville HHS via social media

x Townsville HHS self-sufficiency (reduced patient travel to Brisbane) has seen an increasing trend for the prior three financial years, from 96.06 per cent in 2018-2019 to 96.40 per cent in 2020-2021.

x Data for 2021-2022 has not yet been released.

x Townsville HHS’s Facebook page had a reach of more than 1.53 million people, compared to 2.43 million in 2020-2021. This decrease can be attributed to disengagement with COVID content

x Page visits more than doubled in the year and there was an increase in new followers of 78 per cent.

x The number of First Nations patients that discharged against medical advice, did not wait for emergency care or had a missed specialist outpatient appointment was 13,512 in 2021-2022.

x This represents 11.4 per cent of all First Nations patients treated and 1.8 per cent of all patients treated in the year, compared to 11 per cent and 1.7 per cent for the previous year, respectively.

Combined indigenous access score

x Of the 13,512 care opportunities missed, 88 per cent were for specialist outpatient appointments, 10 per cent were emergency presentations and 2 per cent were admissions where the patient discharged against medical advice.

x The combined access score for all patients (First Nations and non-First Nations) was 5.6 per cent in 2021-2022 and 5.3 per cent in 2020-2021

PILLAR 2 - Ensure efficient and sustainable stewardship of resources

Balanced budget position

Proportion of new contracts awarded locally

x Townsville HHS achieved a surplus of $1.899 million for the year ending 30 June 2022.

x Awarding contracts locally is key to Townsville HHS’s objective of supporting a robust local economy.

x In 2021-2022, more than $25 million of new and renewed contracts were awarded to local (within 125km) Townsville businesses, compared to over $16 million in 2020-2021.

x In 2021-2022 this represented 70 per cent of total contracts investment, compared to 20 per cent in 2020-2021.

Investment in Closing the Gap priorities and providing care for Aboriginal peoples and Torres Strait Islander peoples

x In 2021-2022, Townsville HHS received Making Tracks funding of more than $4 million to support a range of specific initiatives to Close the Gap in health outcomes for First Nations peoples. These initiatives include sexual health, maternity, rheumatic heart disease and mental health services as well as cultural support at TUH and health equity development.

PILLAR 3 - Work collaboratively, embrace innovation and continuously improve

Proportion of committees and advisory groups that have patient, community and staff representation

Number of formal agreements in place with service delivery partners

x 26 per cent of Tier 1-6 committees in Townsville HHS have one or more standing consumer representatives. This representation is consistent with 2020-2021 which was also 26 per cent.

x There are 51 contracts and memoranda of understanding in place between Townsville HHS and other organisations which directly result in the delivery of clinical services, the contract value of which increased by 33 per cent compared to 2020-2021.

Investment in innovation and research

x The Study, Education and Research Trust Account (SERTA) Research Grant Program awarded four grants totalling $25,961. The 2021-2022 grant round was delayed due to the HHS’s COVID-19 pandemic response. This grant round has been awarded in July 2022.

x The HHS invested more than $2 million in innovation and research which includes Tropical Australian Academic Health Centre (TAAHC) membership, the Townsville Research Education Support and Administration unit, and internally funded research and clinical trial positions.

x Townsville HHS achieved 55 per cent of the service agreement performance targets.

Achieve service agreement targets

x Townsville HHS has continued to maintain its level 1 performance rating by the Queensland Department of Health.

x The impact of second and third waves of COVID-19 has resulted in sustained pressures on achieving Emergency Department, elective surgery and specialist outpatient performance measures, particularly in the period January to June 2022

PILLAR 4 - Maintain an exceptional workforce and be a great place to work

Employee opinion survey results

x In late 2021, Townsville HHS introduced a new employee feedback survey which required significantly less time for colleagues to complete. This was in recognition of the workforce pressures experienced as a result of the COVID-19 pandemic and focused on employees’ experience at work.

x The feedback obtained from this survey will be directly addressed by the Townsville HHS Culture Strategy.

Combined recruitment and retention score

Investment in education and training

Proportion of workforce that identify as Aboriginal and Torres Strait Islander

x The rate of permanent separations increased from 5.58 per cent in 2020-2021 to 8.64 per cent in 2021-2022.

x The reason for employee separations is not collected therefore it is not possible to comment on the drivers of this change.

x 537 FTE were employed in training positions by Townsville HHS as at 30 June 2022, compared to 533 in 2021, in the following positions; students in nursing, graduate nurses, medical interns, medical registrars, trainees and apprentices.

x The number of staff identifying as Aboriginal and/or Torres Strait Islander as a percentage of total staff was 3.5 per cent at 30 June 2022, compared to 3.8 per cent at 30 June 2021.

Service standards

During the year the HHS continued to deliver high-quality services to residents across North Queensland. This was achieved while maintaining COVID-19 preparedness in challenging fiscal, infrastructure and resource environments.

Increasing emergency demand throughout the year and the temporary suspension of non-urgent elective surgery impacted Townsville HHS’s ability to provide planned services. This resulted in patients waiting longer than clinically required for elective surgery and specialist outpatient appointments.

Maintaining access to services was a key focus throughout the year. Additional beds were commissioned, funded by the Department of Health, and telehealth, virtual and hospital in the home services expanded to assist.

Financial efficiency impacts are a result of the additional costs of the COVID-19 pandemic.

Table 3: Service Standards – Performance 2021-2022 2021-2022 Target 2021-2022 Actual

Effectiveness measures

Percentage of emergency department patients seen within recommended timeframes1:

Category 1 (within 2 minutes) 100% 100%

Category 2 (within 10 minutes) 80% 76%

Category 3 (within 30 minutes) 75% 77%

Category 4 (within 60 minutes) 70% 83%

Category 5 (within 120 minutes) 70% 98%

Percentage of emergency department attendances who depart within 4 hours of their arrival in the department1 >80% 71%

Percentage of elective surgery patients treated within clinically recommended times:2

Category 1 (30 days) >98% 83%

Category 2 (90 days)3 64%

Category 3 (365 days)3 67%

Rate of healthcare associated Staphylococcus aureus (including MRSA) bloodstream (SAB) infections/10,000 acute public hospital patient days4 <2 0.9

Rate of community mental health follow up within 1-7 days following discharge from an acute mental health inpatient unit5 >65% 74.2%

Proportion of readmissions to acute psychiatric care within 28 days of discharge6 <12% 16.3%

Percentage of specialist outpatients waiting within clinically recommended times:7

Category 1 (30 days) 98% 86%

Category 2 (90 days)8 56%

Category 3 (365 days)8 79%

Percentage of specialist outpatients seen within clinically recommended times:7

Category 1 (30 days) 98% 86%

Category 2 (90 days)⁸ 56%

Category 3 (365 days)⁸ 80%

Effectiveness measures

Median wait time for treatment in emergency departments (minutes)1 11

Median wait time for elective surgery treatment (days)2 42

Efficiency Measure

Average cost per weighted activity unit for Activity Based Funding facilities9 $5,168 $5,480

Other Measures

Number of elective surgery patients treated within clinically recommended times:2

Category 1 (30 days) 3,633 3,085

Category 2 (90 days)³ 1,910

Category 3 (365 days)³ 912

Number of Telehealth outpatient occasions of service events10 10,758 12,753

Total weighted activity units (WAU’s)11

Acute Inpatient 98,915 93,032

Outpatients 21,162 22,358

Sub-acute 13,024 10,853

Emergency Department 17,880 17,562 Mental Health 10,559 9,404 Prevention and Primary Care 2,491 2,412

Ambulatory mental health service contact duration (hours)12 >68,647 48,796

Staffing13 5,602 5,583

1

During the COVID-19 pandemic Emergency Departments across Queensland were presented with demand from both COVID-19 and regular patients. In response many public Emergency Departments established fever clinics to assess and treat suspected COVID-19 cases in a safe and effective manner. As fever clinic services represent an extension of regular operational services and as a result, the 2021-2022 Actual includes some fever clinic activity. Emergency Department performance (including POST) has been impacted by the increased patient treatment time and resources required to manage COVID-19 precautions.

2

In response to the COVID-19 pandemic the delivery of planned care services has been impacted. This has resulted from occasions of temporary suspension of routine planned care services to manage priority demand, increased cancellations resulting from patient illness and staff furloughing as a result of illness or Health Service Directives.

3

As the system focuses to manage the backlog of deferred care patients, treated in time performance will continue to be impacted. As a result, the continuation of treat in time performance targets for category 2 and 3 patients applicable for 20212022 will be carried forward into 2022-2023.

4

Staphylococcus aureus (including MRSA) bloodstream (SAB) infections 2021-2022 Estimated Actual rate is based on data reported between 1 July 2021 and 31 March 2022.

5 Mental Health rate of community follow up 2021-2022 Estimated Actuals are for the period 1 July 2021 to 31 May 2022, as of 12 July 2022.

6 Mental Health readmissions 2021-2022 Actuals are for the period 1 July 2021 to 31 MAY 2022, as of 16 August 2022.

7

In response to the COVID-19 pandemic the delivery of planned care services has been impacted. This has resulted from occasions of temporary suspension of routine planned care services to manage priority demand, increased cancellations resulting from patient illness and staff furloughing as a result of illness or Health Service Directives.

8

As the system focuses to manage the backlog of deferred care patients, treated in time performance will continue to be impacted. As a result, the continuation of treat in time performance targets for category 2 and 3 patients applicable for 20212022 will be carried forward into 2022-2023.

9

The 2021-2022 Target varies from the published 2021-2022 Service Delivery Statement due to a change in the WAU phase. All measures are reported in QWAU Phase Q24. The variation in difference of Cost per WAU to target is a result of the additional costs of the COVID-19 pandemic. 2021-2022 Actuals are as of 22 August 2022.

10 Telehealth 2021-2022 Actual is as of 18 August 2022.

11

The 2021-2022 Actual is below target due to a decrease in routine care services resulting from occasions of temporary suspension of routine planned care services to manage priority demand, increased cancellations resulting from patient illness and staff furloughing as a result of illness or Health Service Directives. The 2021-2022 Target varies from the published 2021-2022 Service Delivery Statement due to a change in the WAU phase. All measures are reported in QWAU Phase Q24. The 2021-2022 Actual figures are as of 22 August 2022. As the Hospital and Health Services have operational discretion to respond to service demands and deliver activity across services streams to meet the needs of the community, variation to the Target can occur.

12

13

Due to a range of factors, including the stretch nature of the target and the impact of the COVID-19 pandemic on service access and capacity, the 2021-2022 Target has not been met. Figures are as of 16 August 2022.

Corporate FTEs are allocated across the service to which they relate. The department participates in a partnership arrangement in the delivery of its services, whereby corporate FTEs are hosted by the department to work across multiple departments. 20212022 Actual is for pay period ending 26 June 2022.

Financial summary

for the year ended 30 June 2022

The 2021-2022 financial year operating surplus of $1.899 million was achieved in an environment which saw the Townsville HHS continue to provide a diverse and extensive service profile across a wide geographical area whilst operationally responding to the COVID-19 pandemic in the region.

Townsville HHS planning processes have ensured that the Townsville HHS continues to meet the present and future needs of the Townsville regional community within the funding allocation and that funds are spent efficiently and effectively. The operating surplus will be invested in enabling clinical equipment to assist staff to deliver world class health care for northern Queensland.

The following financial summary provides an overview of the Townsville HHS financial performance for the year ending 30 June 2022. A more detailed view of the Townsville HHS financial performance is provided in the 2021-2022 financial statements.

Financial Overview 2022 2021

Income $1.212 billion $1.135 billion

Expenses $1.210 billion $1.131 billion

Operating result $1.899 million $4.475 million

Capital Acquisitions $19.085 million $27.245 million

Total Assets $0.917 billion $0.915 billion

Equity $0.828 billion $0.837 billion

Where the funds comes from

Income 2022 $'000 2021 $'000

Activity based funding 733,212 684,673

User charges 95,671 86,372

Other funding for public health services 343,741 324,427

Other revenue and Grants and contributions 39,756 39,982

Total Income 1,212,380 1,135,454

The Townsville HHS is responsible for the delivery of public hospital and health services including medical, surgical, emergency, obstetrics, paediatrics, specialist outpatient clinics, mental health, critical care and clinical support services.

The Service Agreement between Townsville HHS and the Queensland Department of Health for the delivery of the above services, uses weighted activity units to quantify the activity delivered based on a detailed classification system and the cost of the activity based on the National Efficient Price.

User charges principally includes public patients electing to use private health insurance, self-funded private patients, bulk billed outpatients (Medicare) and reimbursements of pharmaceutical benefits and the sale of goods and services.

Other revenue relates principally to block funding provided for Townsville HHS services delivered at Ingham, Ayr, Home Hill, Charters Towers, Richmond, Hughenden and Palm Island, tertiary training and system management.

How the funds are spent

Expenses

Employee expenses 153,320 142,197

Health Service employee expenses 669,836 639,845

Supplies and services 308,633 269,229

Depreciation and amortisation 62,687 65,953

Other expenses 16,005 13,755

Total Expense 1,210,481 1,130,979

The above table shows the resources consumed in 20212022 for the delivery of services across the HHS including Townsville, Ingham, Ayr, Home Hill, Charters Towers, Richmond, Hughenden and Palm Island. Total expenses for 2021-2022 were $1.210 billion or an average of $3.3 million per day. Total expenses increased principally due to new and expanded services to address demand and improve performance relating to access to services, along with the cost of operationally responding to the COVID-19 pandemic.

The largest percentage of spend was against employee expenses including clinicians and support staff (68 per cent). Non-labour expenses such as clinical supplies, pharmaceuticals, prosthetics, pathology, catering, repairs and maintenance, communications, computers and energy accounted for 25.5 per cent of expenditure; 5.2 per cent of expenditure was related to depreciation and amortisation of the asset base.

Financial outlook

In 2022-2023, the Townsville HHS faces several demand side and supply side challenges including increasing community expectations, growing and ageing population, increased chronic health conditions, increasing prevalence of mental health problems in the community, declining private health insurance coverage, workforce attraction and retention, increasing access to culturally appropriate health services for Aboriginal and Torres Strait Islander persons, and a high dependence on effective primary healthcare services.

The THHB and management of the Townsville HHS will continue to undertake careful planning for, and monitoring of, demand and alignment of operational resources/capacity to ensure ongoing affordable and sustainable service delivery.

Anticipated maintenance

Anticipated maintenance is a common building maintenance strategy used by public and private sector industries. All Queensland Health entities are compliant with the Queensland Government Maintenance Management Framework which requires anticipated maintenance reporting.

Anticipated maintenance is maintenance required to prevent the deterioration of an asset or its function, but which has not yet been carried out. Certain anticipated maintenance activities can be postponed without immediately having a conspicuous effect on the functionality of the building. All anticipated maintenance items are risk assessed to identify any potential impact on users and services and are closely managed to ensure the safety of all facilities.

As at 30 June 2022, Townsville HHS had reported total anticipated maintenance of $62.74 million.

The health service has commenced planning of significant Sustaining Capital Maintenance and Renewal Programs for its major facilities to ensure reliable and sustainable health infrastructure that underpins health service delivery capability.

The Townsville HHS has the following strategies in place to mitigate any risks associated with these anticipated items:

x prioritised state health infrastructure planning for replacement of facilities that have exceeded service life

x progressed Priority Capital Program funding submissions for applicable sustaining capital projects

x coordinated health service and Department of Healthfunded capital redevelopment projects to include applicable anticipated remediation works where possible

x prioritised health service-funded anticipated maintenance program as detailed in the Annual Asset Management and Maintenance Plan

x funding of all identified anticipated maintenance assessed as very high risk and emergent conditionbased maintenance activity that cannot be deferred

x regular preventative maintenance inspections and minor repairs where necessary management of critical spare stock holdings where appropriate.

Capital works

The Townsville Hospital and Health Service continued to deliver an extensive capital works program throughout 2021-2022 to address the current and future health service needs for our communities.

Capital works projects delivered included:

x $2.12 million Charters Towers Hospital Renal Unit

x $1.89 million Ingham Hospital Renal Unit.

Capital works projects under construction included:

x $10.10 million TUH Adult Acute Mental Health Inpatient Unit - High-Dependency Unit redevelopment

x $12.98 million TUH South Block Level 1 - ward fit-out.

Capital works projects under design included:

x $17 million TUH Hybrid Theatre

x $4 million TUH outpatient expansion

x $4 million TUH North Queensland Persistent Pain Management Service.

Townsville Hospital and Health Service

FINANCIAL STATEMENTS

For the year ending 30 June 2022

Statement of comprehensive

Statement

Statement

changes

Basis of financial statement

Section A

A1 Objectives

Section

B1 Income

B2 Expenses

B3 Cash and cash

B4 Receivables

B5 Inventories

Other assets

B7 Property, plant and

B8 Trade and other payables

B9 Other liabilities

Leases

Section C

C1

value

risk

Section D

D1 Budgetary reporting

Patient trust

F1 Key management

Related party

F6

Statement of comprehensive income

For the year ended 30 June 2022 2022 2021

Notes $’000 $’000 Income

User charges

Funding for public health services

Grants and other contributions

Other revenue

B1-1 95,671 86,372

B1-2 1,076,953 1,009,100

B1-3 35,170 34,690

B1-4 4,586 5,292

Total Income 1,212,380 1,135,454

Expenses

Employee expenses

Health Service employee expenses

Supplies and services

B2-1 (153,320) (142,197)

B2-1 (669,836) (639,845)

B2-2 (308,633) (269,229)

Grants and subsidies (113) (329)

Interest on lease liabilities (72) (66)

Depreciation and amortisation

B2-3 (62,687) (65,953)

Impairment losses on financial assets (2,930) (1,446)

Other expenses

B2-4 (12,890) (11,914)

Total Expenses (1,210,481) (1,130,979)

Operating result for the year 1,899 4,475

Other comprehensive income

Items that will not be reclassified subsequently to profit or loss

Increase in asset revaluation surplus 33,681 923

Other comprehensive income for the year 33,681 923

Total comprehensive income for the year 35,580 5,398

The accompanying notes

these

statements.

Statement of financial position

As

30 June 2022

Notes

Assets

Current assets

Cash and cash equivalents

B3 66,262 62,085

Trade and other receivables B4 9,105 10,763

Inventories B5 10,012 9,715

Other assets B6 21,911 15,012

Total current assets 107,290 97,575

Non-current assets

Property, plant and equipment

B7-1 805,500 811,944

Right-of-use assets B11-1 4,136 4,451

Intangibles B7-4 67 1,342

Total non-current assets 809,703 817,737

Total assets 916,993 915,312

Liabilities

Current liabilities

Trade and other payables B8 74,488 62,148

Lease liabilities B11-1 796 683

Accrued employee benefits 2,499 2,577

Other liabilities B9 6,541 6,782

Total current liabilities 84,324 72,190

Non-current liabilities

Trade and other payables

B8 1,361 2,213

Lease liabilities B11-1 3,431 3,794

Total non-current liabilities 4,792 6,007

Total liabilities 89,116 78,197

Net assets 827,877 837,115

EQUITY

Contributed equity

B10-1 492,286 537,104

Asset revaluation surplus B10-2 252,313 218,632

Accumulated surpluses 83,278 81,379

Total equity 827,877 837,115

The

notes

Statement of changes in equity

For the year ended 30 June 2022

Contributed Equity Asset revaluation surplus Accumulated surpluses Total equity

B10 $’000 $’000 $’000 $’000

Balance at 1 July 2020 576,449 217,709 76,906 871,064

Operating result for the year 4,475 4,475

Other comprehensive income for the year 923 923

Transactions with members in their capacity as members:

Non-appropriated equity asset transfers (12) (2) (14)

Non-appropriated equity injections 26,620 26,620

Non-appropriated equity withdrawals (65,953) (65,953)

Net transactions with members in their capacity as members (39,345) (2) (39,347)

Balance at 30 June 2021 537,104 218,632 81,379 837,115

Contributed Equity Asset revaluation surplus Accumulated surpluses Total equity

$’000 $’000 $’000 $’000

Balance at 1 July 2021 537,104 218,632 81,379 837,115

Operating result for the year 1,899 1,899

Other comprehensive income for the year - 33,681 - 33,681

Transactions with members in their capacity as members:

Non-appropriated equity asset transfers 1,784 - - 1,784

Non-appropriated equity injections 16,085 16,085

Non-appropriated equity withdrawals (62,687) (62,687)

Net transactions with members in their capacity as members (44,818) - - (44,818)

Balance at 30 June 2022 492,286 252,313 83,278 827,877

The accompanying notes form part

these

Statement of cash flows

For the year ended 30 June 2022 2022 2021 Notes $’000 $’000

Cash flows from operating activities

User charges 96,398 84,574

Funding for public health services 1,004,256 946,661

Grants and other contributions 34,871 25,515

Interest received 128 166

Other revenue 4,211 10,690

Employee expenses (152,720) (139,757)

Health Service Employee expense (664,419) (632,483)

Supplies and services (301,817) (278,018)

Interest payments on lease liabilities (72) (66)

Other expenses (12,909) (12,003)

Net cash from/(used by) operating activities

Cash flows from investing activities

CF-1 7,927 5,279

Payments for property, plant, equipment and intangibles (19,085) (27,245)

Net cash from/(used by) investing activities (19,085) (27,245)

Cash flows from financing activities

Proceeds from equity injections 16,085 26,620

Lease payments (750) (667)

Net cash from/(used by) financing activities 15,335 25,953

Net increase/(decrease) in cash held 4,177 3,987

Cash and cash equivalents at the beginning of the financial year 62,085 58,098

Cash and cash equivalents at the end of the financial year

B3 66,262 62,085

The accompanying notes

statements.

Statement of cash flows

For the year ended 30 June 2022

CF1 NOTES TO THE STATEMENT OF CASH FLOWS

CF-1 Reconciliation of surplus to net cash from operating activities 2022 2021 $’000 $’000

Operating surplus/(deficit) for the year 1,899 4,475

Adjustments for:

Depreciation and amortisation 62,687 65,953

Impairment losses on receivables 2,930 1,447

Revenue - contribution to DOH capital works in progress program (62,687) (65,953)

Assets donated revenue – non-cash (299) (232)

Change in operating assets and liabilities:

(Increase)/decrease in receivables (576) (6,052) (Increase)/decrease in inventories (297) (41) (Increase)/decrease in contract assets (86) (2,715) (Increase)/decrease in other assets (8,248) (1,097) (Increase)/decrease in prepayments 1,435 (2,276)

Increase/(decrease) in trade and other payables 11,488 8,652

Increase/(decrease) in contract liabilities and unearned revenue (241) 6,163

Increase/(decrease) in employee benefits (78) (3,045)

Net cash from operating activities 7,927 5,279

----------------- Non-cash changes

Cash flows ------------

Opening balance

Transfers to/(from) other Queensland Government entities

New leases acquired Other Cash received Cash payments Closing balance $’000 $’000 $’000 $’000 $’000 $’000 $’000

Leases 4,477 500 (750) 4,227 Total 4,477 500 (750) 4,227

----------------- Non-cash changes ----------------- ------------- Cash flows ------------

Closing balance

Transfers to/(from) other Queensland Government entities

New leases acquired Other Cash received Cash payments Closing balance $’000 $’000 $’000 $’000 $’000 $’000 $’000

Lease 3,385 1,759 (667) 4,477 Total 3,385 1,759 (667) 4,477

Basis of financial statement preparation

General information

The Townsville Hospital and Health Service as an individual entity and is controlled by the State of Queensland, the ultimate parent entity.

The head office and principal place of business of the agency is:

100 Angus Smith Drive

Townsville Queensland 4810

Compliance with prescribed requirements

The financial statements have been prepared in compliance with section 62(1) of the Financial Accountability Act 2019 and section 39 of the Financial and Performance Management Standard 2019 The financial statements comply with Queensland Treasury’s Minimum Reporting Requirement for reporting periods beginning on or after 1 July 2021.

The Townsville HHS is a not-for-profit entity and these general-purpose financial statements are prepared on an accrual basis (except for the statement of cash flows which is prepared on a cash basis) in accordance with Australian Accounting Standards and Interpretations applicable to not-for-profit entities.

New accounting standards early adopted and/or applied for the first time in these financial statements are outlined in Note F4

Presentation

Currency and rounding

The financial report is presented in Australian dollars, which are Townsville Hospital and Health Service’s functional and presentation currency. Amounts included in the financial statements have been rounded to the nearest thousand dollars, or in certain cases, the nearest dollar.

Comparatives

Comparatives have been reclassified where appropriate for consistency with current year classification.

Current/non-current classification

Assets and liabilities are classified as either 'current' or 'non-current' in the statement of financial position and associated notes.

Assets are classified as 'current' where their carrying amount is expected to be realised within 12 months after the reporting date. Liabilities are classified as 'current' when they are due to be settled within 12 months after the reporting date, or the Townsville HHS does not have an unconditional right to defer settlement to beyond 12 months after the reporting date.

All other assets and liabilities are classified as non-current.

Authorisation of financial statements for issue

The general-purpose financial statements are authorised for issue by the Board Chair, Health Service Chief Executive and the Chief Finance Officer, at the date of signing the Management Certificate.

Basis of Measurement

These financial statements are general purpose financial statements and have been prepared on both a historical cost and fair value basis in accordance with all applicable new and amended Australian Accounting Standards and Interpretations, applicable to not-for-profit entities, except where stated otherwise. The Townsville HHS is a not-forprofit entity and the financial statements comply with the requirements of Australian Accounting Standards and Interpretations.

Further information

For information in relation to the Townsville Hospital and Health Service’s financial statements:

x Email tsv-public-affairs@health.qld.gov.au or x Visit the Townsville Hospital and Health Service website at: www.townsville.health.qld.gov.au

How we operate – Townsville Hospital and Health Service objectives and activities

A1 OBJECTIVES OF THE TOWNSVILLE HOSPITAL AND HEALTH SERVICE

The Townsville Hospital and Health Service is an independent statutory body established on 1 July 2012 under the Hospital and Health Boards Act 2011 (The Act). The Townsville Hospital and Health Service is governed by the Board, which is accountable to the local community and the Minister for Health.

The Townsville HHS is responsible for providing primary health, community health and hospital services in the area assigned under the Hospital and Health Boards Regulation 2012. The Townsville HHS covers an area of more than 148,000 square kilometres, around 8.5 per cent of Queensland, and serves a population of approximately 250,000. The Townsville HHS also provides tertiary services to 670,000 people throughout northern Queensland from Mackay to the Torres Strait and out to the Northern Territory border.

Funding is obtained predominantly through the purchase of health services by the Department of Health (DOH/the Department) on behalf of both the State and Australian Governments. In addition, health services are provided on a fee-for-service basis mainly for private patient care. Please refer to the Townsville Hospital and Health Service Annual Report 2021-2022 for more information.

NON-WHOLLY OWNED ENTITIES

Investment in Northern Queensland Primary Health Network

The Northern Queensland Primary Health Network (NQPHN) was established as a public company limited by guarantee on 22 May 2015. Townsville HHS is one of 11 members, with each member holding one vote in the company.

The principal place of business of the NQPHN is 42 Spence Street, Cairns, Queensland. The company’s principal purpose is to work with general practitioners, other primary health care providers, community health services, pharmacists and hospitals in Queensland to improve and coordinate primary health care across the local health system for patients requiring care from multiple providers.

As each member has the same voting entitlement, it is considered that no member has controlling power over NQPHN (as defined by AASB 10 Consolidated Financial Statements). While Townsville HHS currently has 9.09 per cent of the voting power of the NQPHN and the fact that

every other member also has 9.09 per cent voting power, it limits the extent of any influence that the Townsville HHS may have over the NQPHN.

Each member’s liability to NQPHN is limited to $10. The NQPHN is legally prevented from paying dividends to its members and its constitution also prevents any income or property of the company being transferred directly or indirectly to or amongst the members.

As the NQPHN is not controlled by the Townsville HHS and is not considered a joint operation or an associate of the Townsville HHS, the financial results of the NQPHN are not required to be disclosed in these statements.

Tropical Australian Academic Health Centre Limited Tropical Australian Academic Health Centre Limited (TAAHC) registered as a public company limited by guarantee on 3 June 2019. The Townsville HHS is one of seven founding members along with Cairns and Hinterland Hospital and Health Service, Mackay Hospital and Health Service, North West Hospital and Health Service, Torres and Cape Hospital and Health Service, Northern Queensland Primary Health Network and James Cook University. Each founding member holds two voting rights in the company and is entitled to appoint two directors.

The principal place of business of TAAHC is Townsville, Queensland. The company’s principal purpose is the advancement of health through the promotion of the study and research topics of special importance to people living in the tropics.

As each member has the same voting entitlement (14.3%), it is considered that none of the individual members has power or significant influence over TAAHC (as defined by AASB 10 Consolidated Financial Statements and AASB 128 Investments in Associates and Joint Ventures). Each members’ liability to TAAHC is limited to $10. TAACH’s constitution prevents any income or property of the company being transferred directly or indirectly to or amongst the members. Each member must pay annual membership fees as determined by the board of TAAHC.

As TAAHC is not controlled by Townsville HHS and is not considered a joint operation or an associate of Townsville HHS, financial results of TAAHC are not required to be disclosed in these statements.

SECTION B

Notes about financial performance

This section considers the income and expenses of the Townsville Hospital and Health Service.

B1 INCOME

Note B1-1: User charges

Revenue from contracts with customers

2022 2021 $’000 $’000

Service income and recoveries 11,674 7,804

Pharmaceutical Benefits Scheme 40,050 33,122

Public patient income 15,223 14,591

Private hospital bed income 11,894 12,386

Other hospital services 16,830 18,469

Total 95,671 86,372

Note B1-2: Funding for public health services

2022 2021 $’000 $’000

User Charges

Revenue from contracts with customers is recognised when the service is rendered and can be measured reliably with a sufficient degree of certainty. This involves either invoicing for related goods/ services and/or the recognition of accrued revenue. Revenue in this category primarily consists of hospital fees (private patients), reimbursements of pharmaceutical benefits and the sale of goods and services.

Funding for public health services

Funding is provided predominantly from the Department of Health for specific public health services purchased by the Department in accordance with a service agreement. The Australian Government pays its share of National Health funding directly to the Department of Health, for on forwarding to the Hospital and Health Service. The service agreement is reviewed periodically and updated for changes in activities and prices of services delivered by Townsville HHS. Cash funding from the Department of Health is received fortnightly for State payments and monthly for Commonwealth payments and is recognised as revenue as the performance obligations under the service level agreement are discharged.

Revenue from contracts with customers

Department of Health

Activity based funding 422,148 394,719

Australian Government Activity based funding 311,064 289,954

Other funding for public health services

Department of Health Block funding 93,758 94,534

Tertiary training 23,356 22,643

System funding 108,980 85,705 Depreciation funding 62,687 65,952

Australian Government Block funding 37,600 42,983

Tertiary training 6,350 5,421 System funding 11,010 7,189

Total 1,076,953 1,009,100

At the end of the financial year, an agreed technical adjustment between the Department of Health and Townsville HHS may be required for the level of services performed above or below the agreed levels, which may result in a receivable or unearned revenue. This technical adjustment process is undertaken annually according to the provisions of the service level agreement and ensures that the revenue recognised in each financial year correctly reflects Townsville HHS’ delivery of health services.

Due to the COVID-19 pandemic, the Commonwealth Government has agreed to provide a guaranteed Activity Based Funding (ABF) envelope for the 20212022 financial year under the National Health Reform Agreement (commonly known as a Minimum Funding Guarantee (MFG)). For the months of January to June 2022, a full MFG has been applied to both the state and commonwealth portion of funding, resulting in no financial adjustments for under-delivery or over-delivery associated with this period against ABF targets. The MFG was applied to the full year in 2020-2021.

ABF funding is recognised where the specific conditions have been met or funding is renegotiated with the Department and may result in a deferral or return of revenue recognised as a liability in the statement of financial position.

Block funding is not based on levels of public health care activity. Non-activity-based funding (block etc.) is received for other services the Townsville HHS has agreed to provide as per the service agreement. This funding has conditions attached which are not related to activity covered by ABF. Non-activity-based funding is recognised on a fortnightly basis upon receipt of funds and accords with the requirements of AASB 1058.

Tertiary training funding supports teaching, training and research in public hospitals, and public health programs. System Manager funds are funds paid directly to the HHSs from the Departments’ operating account and does not form part of the National Health Reform agreement.

The service agreement between the Department of Health and the Townsville HHS specifies that the Department of Health funds the Townsville HHS’s depreciation and amortisation charges via non-cash revenue. The Department of Health retains the cash to fund future major capital replacements. This transaction is shown in the Statement of Changes in Equity as a non-appropriated equity withdrawal. Depreciation Funding will be recognised under AASB 1058

In March 2020, the Commonwealth and states entered into a National Partnership on COVID-19 response. Under this agreement, the parties agreed to work together in response to the COVID-19 pandemic and to jointly fund additional health expenditure incurred to effectively manage the COVID-19 outbreak.

Additional revenue of $40.87million (2021: $18.46million) in COVID-19 Public Health programs were recognised as revenue transactions during the 2021-2022 financial year in response to the COVID-19 pandemic. Refer to note F6.

Revenue from contracts with customers

Australian Government - Specific purpose recurrent grants 23,380 22,808

Australian Government - Specificpurpose capital grants 32 16

Other grants 2,032 2,548

Other grants and contributions

Donations other 107 143

Donations non-current physical assets 299 232

Services received below fair value 9,320 8,943

Total 35,170 34,690

Grants, contributions, and donations revenue arise from nonexchange transactions where the Townsville HHS does not directly give approximately equal value to the grantor.

Where the grant agreement is enforceable and contains sufficiently specific performance obligations for the Townsville HHS to transfer goods or services to a third-party on the grantor’s behalf, the transaction is accounted for under AASB 15 Revenue from Contracts with Customers. In this case, revenue is initially deferred (as a contract liability) and recognised as or when the performance obligations are satisfied.

Otherwise, the grant is accounted for under AASB 1058 Income of Not-for-Profit Entities, whereby revenue is recognised upon receipt of the grant funding, except for special purpose capital grants received to construct non-financial assets to be controlled by the Townsville HHS. Special purpose capital grants are recognised as unearned revenue when received, and subsequently recognised progressively as revenue as the Townsville HHS satisfies its obligations under the grant through construction of the asset.

Grants included from Revenue from contracts with customers consist of Commonwealth funding agreements that are in place according to the terms of the contract. Grant revenue is determined by the level of care and the nature of the service provided. Revenue is recognised and measured in compliance with AASB 15 upon provision of services.

Specific purpose recurrent grants have Commonwealth funding agreements in place and have specific requirements for the funding to be provided. Funding is determined by the level of care or service provided. As such, these funds are recognised under AASB 15 and recognised upon provision of service.

Specific purpose capital grants have Commonwealth funding agreements in place where funding must be used for specific purpose capital projects/equipment.

The Townsville HHS will retain ownership of the final asset. Revenue will be recognised under AASB 15 and recognised over time.

Other Grants have formal agreements in place and funding is based on levels of service and/or activities performed. Revenue is recognised under AASB 15 upon provision of service or activity performed.

Donations Other are donations of cash or equipment that is provided unconditionally. The Townsville HHS will retain donated funds for general use. The Townsville HHS does not provide an equivalent value or service in return for the donation. These funds are recognised under AASB 1058 and recognised upon receipt.

Services received below fair value represents services received by the Townsville HHS below fair value, from the Department of Health $9.32million (2021: $8.94million). The Townsville HHS has brought the income and corresponding expense into account at 30 June 2022 and is included in other grants and contributions and classified under AASB 1058 Income for Not-for-Profit Entities.

Note B1-4: Other revenue

2022 2021 $’000 $’000

Interest 128 166

Rental income 634 519

Sale proceeds of non-capitalised assets 2 2

Fees, charges and recoveries 3,737 4,487

Gain on sale of property plant and equipment 85 118

Total other revenue 4,586 5,292

Other revenue

Other revenue is recognised when the right to receive the revenue has been established. Revenue is measured at the fair value of the consideration received, or receivable.

B 2 EXPENSES

Note B2-1: Employee expenses

2022 2021 $’000 $’000

Employee Benefits

Wages and salaries 73,648 69,138

Annual leave levy 7,789 5,962

Long service leave levy 4,280 4,770

Employer super contribution 9,608 8,795

Termination expenses 60 7

Employee-related expenses

Workcover expenses 5,937 5,399

Other employee related expenses 51,998 48,126

Total employee expenses 153,320 142,197

Health Service Employee expenses 669,836 639,845

Employee Benefits

Board members, Executives and Senior Medical Officers are directly engaged by Townsville HHS. The number of full-time equivalent staff employed in this capacity was 294 (2021: 280).

(i) Wages, Salaries and Sick Leave

Wages and salaries due but unpaid at reporting date are recognised in the Statement of Financial Position at current salary rates. As the Townsville HHS expects such liabilities to be wholly settled within 12 months of the reporting date, the liabilities are recognised at undiscounted amounts. Prior history indicates that on average, sick leave taken each reporting period is less than the entitlement accrued. This is expected to continue in future periods. Accordingly, it is unlikely that existing accumulated entitlements will be used by employees and no liability for unused sick leave entitlements is recognised. As sick leave is non-vesting, an expense is recognised for this leave as it is taken.

(ii) Annual and Long Service Leave

The Townsville HHS participates in the Annual Leave Central Scheme and the Long Service Leave Scheme.

Under the Queensland Government’s Annual Leave Central Scheme and the Long Service Leave Central Scheme, levies

are payable by the Townsville HHS to cover the cost of employee and Department of Health contract staff’s annual leave (including leave loading and on-costs) and long service leave. These levies are expensed in the period in which they are payable. Amounts paid to staff for annual leave and long service leave are claimed from the schemes quarterly in arrears which is currently facilitated by the Department of Health.

No provision for annual leave or long service leave is recognised in the financial statements of the Townsville HHS, as the liability for these schemes is held on a wholeof-government basis and reported in those financial statements pursuant to AASB 1049 Whole-of-Government and General Government Sector Financial Reporting

(iii) Superannuation

Post-employment benefits for superannuation are provided through defined contribution(accumulation) plans or the Queensland Government’s defined benefit plan (the former QSuper defined benefit categories now administered by the Government Division of the Australian Retirement Trust) as determined by the employee’s contributions of employment.

Defined contribution plans – Contributions are made to the eligible complying superannuation funds based on the rates specified in the relevant EBA or other conditions of employment. Contributions are expensed when they are paid or become payable following completion of the employee’s service each pay period.

Defined benefit plan – The liability for defined benefits is held on a whole-of-government basis and reported in those financial statements pursuant to AASB 1049 Whole of Government and General Government Sector Financial Reporting. The amount of contributions for defined benefit plan obligations is based upon the rates determined on the advise of the State Actuary. Contributions are paid by the Department at the specified rate following completion of employee’s service each pay period. The Department’s obligations are limited to those contributions paid.

(iv) Other employee related expenses

Other employees related expenses include recreation leave, long service leave, sick leave, other leave, professional development, salary recoveries and payments made to staff.

Employee related expenses

The Townsville HHS pays premiums to WorkCover Queensland in respect of its obligations for employee compensation related to workplace injuries, health, and safety.

Workers' compensation insurance is a consequence of employing employees but is not counted in an employee's total remuneration package. It is not an employee benefit and is recognised separately as employee-related expenses.

Health service employee expenses

The Hospital and Health Service through service arrangements with the Department of Health has engaged 5,289 (2021: 5,298) full-time equivalent persons at 30 June 2022.

In accordance with the Hospital and Health Boards Act section 67, the employees of the Department of Health are referred to as Health Service Employees. Under this arrangement the Department provides employees to perform work for Townsville HHS and acknowledges and accepts its obligations as the employer of these employees. Townsville HHS is responsible for the day-today management of these departmental employees and reimburses the department for the salaries and on-costs of these employees.

Recoveries of salaries and wages costs for health service employees working for other agencies are recorded as revenue. Refer to note B1-3

Note B2-2: Supplies and services

2022 2021 $’000 $’000

Consultants and contractors 22,761 18,050

Electricity and other energy 8,406 7,627

Patient travel 12,241 12,467

Other travel 3,329 2,410

Building services 3,134 3,055

Computer services 7,167 7,322

Motor vehicles 547 430

Communications 14,621 14,332

Repairs and maintenance 16,710 15,670

Expenses relating to capital works 5,076 2,958

Rental expenses 1,101 320

Lease expenses 3,426 3,298

Drugs 55,507 49,901

Clinical supplies and services 99,067 88,541

Catering and domestic supplies 15,599 15,550

Other supplies and services 39,941 27,298

Total supplies and services 308,633 269,229

Note B2-3 Depreciation and Amortisation 2022 2021 $’000 $’000

Depreciation

Buildings and Land Improvements 48,306 47,660

Plant and equipment 12,291 14,002

ROU Depreciation

Buildings 815 702

Amortisation

Software purchased 165 268

Software developed 1,110 3,321

Total Depreciation and Amortisation 62,687 65,953

Supplies and Services

For a transaction to be recognised as supplies and services, the value of goods or services received by the Townsville HHS must be of approximately equal value to the value of the consideration exchanged for these goods and services.

The Townsville HHS receives also corporate services support from the Department of Health for no cost. Corporate services received include payroll services, accounts payable services, finance transactional services and taxation services. The cost of services received by the Townsville HHS below fair value is $9.32 million (2021: $8.94million), as determined by the Department of Health. The Townsville HHS has brought the income and corresponding expense to account at 30 June 2022 and is included in other supplies and services.

Lease expenses

Lease expenses include lease rentals for short-term leases and office accommodation payments for nonspecialised commercial office accommodation under the Queensland Government Accommodation Office (QGAO) framework. Refer to Note B11 for breakdown of lease expenses and other lease disclosures.

Payments for QFleet leasing arrangements are expensed as incurred and categorised in lease expenses.

Depreciation and Amortisation

Depreciation and amortisation expenses include depreciation on property plant and equipment (Note B7- 1), right-of-use assets (Note B11-1) and amortisation of intangibles (Note B7-4)

Note B2-4: Other expenses 2022 2021 $’000 $’000

Audit fees* 568 511

Bank fees 46 56

Insurance** 9,869 9,648

Inventory written off 194 47

Losses from the disposal of noncurrent assets 436 147

Special payments - ex gratia payments 153 143

Other legal costs 371 508

Journals and subscriptions 225 260

Advertising 567 321

Interpreter fees 173 215

Fees, fines and other charges 289 64

Other (1) (6)

Total other expenses 12,890 11,914

* During the 2022 financial year $239,000 fees were quoted for supply of services provided by Queensland Audit Office, the auditor of the Townsville HHS (2021: $239,750). The Townsville HHS paid $312,940 to other service providers for internal audit services (2021: $382,586). Some of these services will not be finalised in the 2021-2022 financial year and as such are not included in the above Audit fees.

** Includes Queensland Government Insurance Fund (QGIF)

Special Payments

Special payments include ex-gratia expenditure and other expenditure that the Townsville HHS is not contractually or legally obligated to make to other parties. In compliance with the Financial and Performance Management Standard 2019, the Townsville HHS maintains a register setting out details of all special payments exceeding $5,000

Special payments during 2021-2022 include payments over $5,000 for compensation for damages including loss or damage to a patient’s personal effects.

Insurance Queensland Health annually purchases insurance cover for hospital and health services and the Department of Health through the Queensland Government Treasury managed self-insurance scheme, the Queensland Government Insurance Fund (QGIF). For the 2021-2022 policy year, the premium was allocated to each hospital and health service according to the underlying risk of an individual insured party.

Property and general losses above a $10,000 threshold are insured through the Queensland Government Insurance Fund. Health litigation payments above a $20,000 threshold and associated legal fees are also insured through QGIF. Premiums are calculated by QGIF on a risk-assessed basis.

The Department of Health pays premiums to WorkCover Queensland on behalf of all hospital and health services in respect of its obligations for employee compensation. These costs are reimbursed to the department.

Notes about our financial position

This section provides information on the assets used in the operation of the Townsville Hospital and Health Service’s service and the liabilities incurred as a result.

B3 CASH AND CASH EQUIVALENTS

2022 2021 $’000 $’000

Cash at bank and on hand 53,403 48,559

Restricted cash* 12,859 13,526

Total cash and cash equivalents 66,262 62,085

*Refer to Note E2

B4 RECEIVABLES

2022 2021 $’000 $’000

Trade receivables 8,626 10,097

Less: Loss allowance (979) (774) 7,647 9,323

GST input tax credits receivable 1,640 1,592

GST payable (182) (152) 1,458 1,440

Total receivables 9,105 10,763

Cash and cash equivalents include all cash and cheques receipted at 30 June as well as deposits with financial institutions.

General Trust Funds are managed on an accrual basis and form part of the annual general-purpose financial statements. This money is controlled by the Townsville HHS and forms part of the cash and cash equivalents balance; however, it is restricted as it can only be used for specific purposes. The restricted cash balances are invested under the whole-of-government arrangements with Queensland Treasury Corporation.

Receivables

Receivables are measured at amortised cost which approximates their fair value at reporting date.

Trade debtors are recognised at the amounts due at the time of sale or service delivery i.e. the agreed purchase/ contract price. Settlement of these amounts is required within 30 days from invoice date.

Other debtors generally arise from transactions outside the usual operating activities of the Townsville HHS and are recognised at their assessed values. Terms are a maximum of three months, no interest is charged and no security is obtained.

OF RECEIVABLES

Accounting policy – Impairment of receivables

The loss allowance for trade and other receivables reflects lifetime expected credit losses and incorporates reasonable and supportable forward-looking information. Economic changes impacting the Townsville HHS's debtors, and relevant industry data form part of the Townsville HHS's impairment assessment.

The Townsville HHS’s receivables are from Queensland Government agencies or Australian Government agencies. No loss allowance is recorded for these receivables. Refer to Note C2 for the Townsville HHS credit risk management policies.

Where the Townsville HHS has no reasonable expectation of recovering an amount owed by a debtor, the debt is written-off by directly reducing the receivable against the loss allowance. This occurs when the Townsville HHS has ceased enforcement activity. If the amount of debt written off exceeds the loss allowance, the excess is recognised as an impairment loss.

Disclosure – Credit risk exposure of receivables

The maximum exposure to credit risk at balance date for receivables is the gross carrying amount of those assets. No collateral is held as security and there are no other credit enhancements relating to Townsville HHS’s receivables.

The Townsville HHS uses a provision matrix to measure the expected credit losses on trade and other debtors. Loss rates are calculated separately for groupings of customers with similar loss patterns by debt type. The Townsville HHS has measured expected credit losses based on the sale of services reflecting the different customer profiles and debt categories for these revenue streams. Debt categories include Medicare ineligibles, inpatient, outpatient, pharmacy, other debt (inter-entity and corporate) and recoverability rates are based on historical loss patterns.

The calculations reflect historical observed default rates calculated using credit losses experienced on past transactions during the last nine years preceding 30 June 2022. The Townsville HHS has not adjusted the credit

loss calculation for any forward-looking indicators as national or local macroeconomic factors would not cause a significant change in overall loss value.

The COVID-19 pandemic has no material impact to credit losses or credit risk on receivables at 30 June 2022

Set out below is the credit risk exposure on the Townsville HHS’s trade and other debtors broken down by debtor types.

Debt Type

2022 2021 Gross receivables Loss rate

Expected credit losses Gross receivables Loss rate

Expected credit losses $’000 % $’000 $’000 % $’000

Ineligible - Inpatient 658 29% 191 1,967 29% 570

Ineligible - Outpatient 292 17% 50 298 15% 45

Inpatient 3,939 3% 118 4,289 3% 129

Outpatient 1,275 2% 26 1,467 2% 29

Other - Pharmacy 38 3% 1 38 3% 1

Other 2,424 24% 593 2,038 0% 8,626 979 10,097 774

Movements in the loss allowance for receivables are as follows: 2022 $'000 2021 $’000

Opening balance 774 554

Receivables written off during the year as uncollectable (2,725) (1,227)

Additional provisions recognised 2,930 1,447

Closing balance 979 774

B5 INVENTORIES

Inventories consist mainly of pharmaceutical and clinical supplies held for distribution. Inventories are measured at cost following periodic assessments for obsolescence.

B6 OTHER ASSETS

Current

Where damaged or expired items have been identified, provisions are made for impairment.

2022 2021 $’000 $’000

Prepayments 3,408 4,843

Contract assets 4,739 4,653

Other 13,764 5,516

Total other current assets 21,911 15,012

Disclosure – Contract assets

Contract assets arise from contracts with customers and are transferred to receivables when the Townsville HHS’s right to payment becomes unconditional, this usually occurs when the invoice is issued to the customer. Accrued revenue that does not arise from contracts with customers are reported as part of Other.

Contract assets were not impaired as they relate primarily to Government contracts and carry minimal risk of nonpayment.

Prepayments and COVID-19 Leave

An additional 2 days of leave was granted to all nonexecutive employees of the Department of Health and HHS’s as at 10 September 2020 based on set eligibility criteria as recognition of the effects of the COVID-19 pandemic on staff wellbeing. This leave must be taken by 31 March 2023 or eligibility is lost. The entire value of the leave for health service employees was paid by Townsville HHS to the Department of Health in advance. The leave is expensed in the period it which it is taken, and the remaining balance is treated as a pre-payment to the Department of Health of $1.23million (2021: $2.42million).

B7 PROPERTY, PLANT AND EQUIPMENT 2022 2021 $’000 $’000

Land - at fair value 59,964 59,401

Buildings - at fair value 1,476,095 1,358,110

Less: Accumulated depreciation (788,937) (673,117) 687,158 684,993

Plant and equipment - at cost 167,131 165,414

Less: Accumulated depreciation (116,479) (109,371) 50,652 56,043

Heritage, artworks and cultural assets 35

Capital works in progress - at cost 7,691 11,507 805,500 811,944

Land Buildings Plant and equipment

Heritage, artworks and cultural assets

Capital works in progress Total

$’000 $’000 $’000 $’000 $’000 $’000

Balance at 30 June 2020 59,856 716,146 56,190 10,696 842,888

Additions 8,240 14,103 7,700 30,043

Disposals (248) (248)

Revaluation increments 1,378 1,378

Revaluation decrements (455) (455)

Transfers between classes 6,889 (6,889)

Depreciation expense (47,660) (14,002) (61,662)

Balance at 30 June 2021 59,401 684,993 56,043 11,507 811,944

Additions 7,305 4,986 35 6,759 19,085

Disposals (225) - (172) - - (397)

Revaluation increments 788 32,893 33,681

Revaluation decrements 1,784 1,784

Transfers between classes - 10,273 302 - (10,575)Depreciation expense (48,306) (12,291) (60,597)

Balance at 30 June 2022 59,964 687,158 50,652 35 7,691 805,500

Note B7-2: Accounting Policies

Property, Plant and Equipment

Recognition threshold for property, plant and equipment

Items of property, plant, and equipment with a cost or other value equal to more than the following thresholds, and with a useful life of more than one year, are recognised at acquisition. Items below these values are expensed on acquisition.

Class Threshold

Land $1

Buildings and Land Improvements $10,000

Plant and Equipment $5,000

Heritage, artworks and cultural assets $5,000

Key Judgement: Expenditure is only capitalised if it increases the service potential or useful life of the existing asset. Maintenance expenditure that merely restores original service potential (arising from ordinary wear and tear, for example) is expensed.

Acquisition of Assets

Actual cost is used for the initial recording of all non-current asset acquisitions. Cost is determined as the value given as consideration plus costs incidental to the acquisition, including all other costs incurred in getting the assets ready for use.

Capital works in progress are at cost until they are ready for use. The construction of major health infrastructure assets is managed by the Department of Health on behalf of the Townsville HHS. These assets are assessed at fair value upon practical completion by an independent valuer. They are then transferred from the Department of Health to the Townsville HHS via an equity adjustment.

Where assets are received free of charge from another Queensland Government entity (whether because of a machinery-of-government change or other involuntary transfer), the acquisition cost is recognised at the gross carrying amount in the books of the transferor immediately prior to the transfer together with any accumulated depreciation.

Assets acquired at no cost or for nominal consideration, other than from an involuntary transfer from another Queensland Government entity, are recognised at their fair value at date of acquisition in accordance with AASB 116 Property, Plant and Equipment.

Subsequent measurement of property, plant and equipment

Land and buildings are subsequently measured at fair value as required by Queensland Treasury’s Non-Current Asset Policies for the Queensland Public Sector. These assets are reported at their revalued amounts, being the fair value at the date of valuation, less any subsequent accumulated depreciation and subsequent accumulated impairment losses where applicable. The cost of items acquired during the financial year has been judged by management to materially represent their fair value at the end of the reporting period.

Plant and equipment are measured at cost net of accumulated depreciation and any impairment in accordance with Queensland Treasury’s Non-Current Asset Policies for the Queensland Public Sector. The carrying amounts for such plant and equipment at cost are not materially different from their fair value.

Heritage, artworks and cultural assets are measured at fair value. The cost at the date of acquisition was equivalent to fair value.

Depreciation

Land is not depreciated as it has an unlimited useful life.

Buildings, plant, and equipment are depreciated on a straight-line basis to allocate the revalued amount or net cost of each asset (respectively), less its estimated residual value, progressively over its estimated useful life to the Townsville HHS.

Heritage, artworks and cultural assets is not depreciated as it has an unlimited useful life.

Capital works in progress are not depreciated until ready for use. These assets are then reclassified to the relevant class within property, plant, and equipment.

Any expenditure that increases the capacity or service potential of an asset is capitalised and depreciated over the remaining useful life of the asset to the Townsville HHS.

Key Estimate: The depreciation rate is determined by application of appropriate useful life to relevant noncurrent asset classes. The useful lives could change significantly because of change in use of the asset, technical obsolescence or some other economic event. The impact on depreciation can be significant and could result in a write-off of the asset.

For each class of depreciable assets, the following depreciation rates are used:

Class Rate

Buildings 2.5% to 3.3%

Plant and equipment 5% to 33.33%

Accounting Policy

Indicators of impairment and determining the recoverable amount

All property, plant and equipment assets are assessed for indicators of impairment on an annual basis or, where the asset is measured at fair value, for indicators of a change in fair value/service potential since the last valuation arise, the asset is revalued at the reporting date under AASB 13 Fair value Measurement. If an indicator of possible impairment exists, the department determines the asset’s recoverable amount under AASB 136 Impairment of Assets. Recoverable amount is equal to the higher of the fair value less costs of disposal and the asset’s value in use subject to the following:

x As a not-for-profit entity, certain property, plant, and equipment of the department is held for the continuing use of its service capacity and not for the generation of cash flows. Such assets are typically specialised in nature. In accordance with AASB 136, where such assets measured at fair value under AASB 13, that fair value (with no adjustment for disposal costs) is effectively deemed to be a recoverable amount. Consequently, AASB 136 does not apply to such assets unless they are measured at cost.

x For other non-specialised property, plant and equipment measured at fair value, where indicators of impairment exist, the only difference between the asset’s fair value and its fair value less costs of disposal, is the incremental costs attributable to the disposal of the asset. Consequently, the fair value of the asset determined under AASB 13 will materially approximate its recoverable amount where the disposal costs attributable to the asset are negligible. After the revaluation requirements of AASB 13 are first applied to these assets, applicable disposal costs are assessed and, in the circumstances where such costs are not negligible, further adjustments to the recoverable amount are made in accordance with AASB 136.

For all other remaining assets measured at cost, and assets within economic entity held for the generation of cashflows recoverable amount is equal to the higher of the fair value less costs of disposal and the asset’s value in use.

Value in use is equal to the present value of the future cashflows expected to be derived from the asset, or where the department no longer uses an asset and has made a formal decision not to reuse or replace the asset, the value in use is the present value of net disposal proceeds.

An impairment loss is recognised immediately in the Statement of Comprehensive Income, unless the asset is carried at a revalued amount. When the asset is measured at a revalued amount, the impairment loss is offset against the asset revaluation surplus of the relevant class to the extent available.

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised as income, unless the asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Revaluation of Land and Buildings at fair value Property, plant, and equipment classes measured at fair value are revalued on an annual basis by an independent professional valuer, or by the use of appropriate and relevant indices. Where an asset is revalued using a market or an income valuation approach, any accumulated impairment losses at that date are eliminated against the gross amount of the asset prior to restating for the revaluation.

Revaluations using an independent professional valuer are undertaken using a rolling revaluation plan over three years. However, if an asset class experiences significant and volatile changes in fair value, that class is subject to specific appraisal in the reporting period, where practicable, regardless of the timing of the last specific appraisal.

Where assets have not been specifically appraised in the reporting period, their previous valuations are materially kept up to date via the application of relevant indices. The Townsville HHS ensures that the application of such indices results in a valid estimation of the assets' fair values at reporting date.

The valuer supplies the indices used for the various types of assets. Such indices are either publicly available or are derived from market information available to the valuer. The valuer provides assurance of their robustness, validity and appropriateness for application to the relevant assets.

Accounting for Changes in Fair Value

Any revaluation increment arising on the revaluation of an asset is credited to the asset revaluation surplus of the appropriate class, except to the extent it reverses a revaluation decrement for the class previously recognised as an expense. A decrease in the carrying amount on revaluation is charged as an expense, to the extent it exceeds the balance, if any, in the revaluation surplus relating to that asset class.

The Townsville HHS has adopted the cost valuation approach (e.g. current replacement cost) – accumulated depreciation is adjusted to equal the difference between the gross amount and the carrying amount, after taking into account accumulated impairment losses. This is generally referred to as the ‘gross method’.

Valuation Land

For financial reporting purposes, the land and building revaluation process is overseen by the Board and coordinated by senior management and support staff.

Key Judgement: The fair values reported by the Townsville HHS are based on appropriate valuation techniques that maximise the use of available and relevant observable inputs and minimise the use of unobservable inputs.

Land is measured at fair value using indexation or assetspecific independent revaluations, being provided by an independent quantity surveyor, Jacobs Group (Australia) Pty Ltd. Independent asset specific revaluations are performed with sufficient regularity to ensure land assets are carried at fair value.

Land indices are based on actual market movements for the relevant locations and asset category and are applied to the fair value of land assets on hand. Independent land revaluations were conducted utilising comparative market analysis data as at April 2022, with an effective date as at 30 June 2022. Land resulted in a revaluation increment of $788,000 (2021: decrement of $455,000).

Buildings

Valuation approach (Key judgement): Current replacement cost (due to no active market for such facilities) - Reflecting the specialised nature of health service buildings, fair value is determined by applying replacement cost methodology or an index which approximates movement in market prices for construction labour and other key resource inputs, as well as changes in design standards as at the reporting date. Both methodologies are executed on behalf of the Townsville HHS by an independent quantity surveyor and valuer Jacobs Group (Australia) Pty Ltd. The Townsville HHS undertakes a three-year rolling revaluation plan for valuation of assets. Assets not revalued in a financial year are adjusted through the application of indices.

Inputs: (Key Estimates): The valuation methodology for the independent valuation uses historical and current construction costs. The replacement cost of each building at date of valuation is determined by considering Townsville location factors and comparing against current construction costs. The valuation is provided for a replacement building of the same size, shape and functionality that meets current design standards, and is based on estimates of gross floor area, number of floors, building girth and height and existing lifts and staircases.

This method makes an adjustment to the replacement cost of the modern-day equivalent building for any utility embodied in the modern substitute that is not present in the existing asset (e.g. mobility support) to give a gross replacement cost that is of comparable utility (the modern equivalent asset). The methodology makes further adjustment to total estimated life taking into consideration physical obsolescence impacting on the remaining useful life to arrive to the current replacement cost via straight-line depreciation.

For residential buildings held by the Townsville HHS on separate land titles, fair value is determined by reference to independent market revaluations.

On revaluation, accumulated depreciation is restated proportionately with the change in the carrying amount of the asset and the change in the estimate of remaining useful life.

Assets under construction are not revalued until they are ready for use.

The impact of the valuation exercise conducted in April 2022, with an effective date as at 30 June 2022, resulted in a building current replacement cost net increment of $32,893,000 (2021: increment of $1,378,000). The valuation increment was primarily due to an 8% increase in indexation valuation in 2021-2022 due to rising construction costs.

and

Recognition and Measurement

Intangible assets of the Townsville HHS with a historical cost or other value equal to or greater than $100,000 are recognised in the financial statements.

Items with a lesser value are expensed. Any training costs are expensed as incurred.

There is no active market for any of the Townsville HHS’s intangible assets. As such, the assets are recognised and carried at historical cost less accumulated amortisation and accumulated impairment losses.

Expenditure on research activities relating to internally generated intangible assets is recognised as an expense in the period in which it is incurred.

Costs associated with the internally generated intangible assets are capitalised and amortised under the amortisation policy below.

No intangible assets have been classified as held for sale or form part of a disposal group held for sale.

Amortisation Expense Accounting Policy

All intangible assets of the Townsville HHS have finite useful lives and are amortised on a straight-line basis over their estimated useful life to the Townsville HHS. Straight line amortisation is used reflecting the expected consumption of economic benefits on a progressive basis over the intangible’s useful life. The residual value of all the Townsville HHS's intangible assets is zero.

Useful Life

Key Estimate: For each class of intangible asset the following amortisation rates are used:

Intangible Asset Rate

Software Purchased 20%

Internally Generated Intangible Asset 20%

Impairment Accounting Policy

All intangible assets are assessed for indicators of impairment on an annual basis. If an indicator of possible impairment exists, the Townsville HHS determines the asset's recoverable amount. Any amount by which the asset's carrying amount exceeds the recoverable amount is recorded as an impairment loss.

Intangible assets are principally assessed for impairment by reference to the actual and expected continuing use of the asset by the Townsville HHS, including discontinuing the use of the intangible asset. Recoverable amount is determined as the higher of the asset's fair value less costs to sell and its value-in-use.

Note B7-4: Intangibles 2022 2021 $’000 $’000

Total intangibles

Software generated 11,661 11,661

Software purchased 3,817 3,817

Software generated - Accumulated amortisation (11,661) (10,551) Software purchased - Accumulated amortisation (3,750) (3,585)

Total intangibles 67 1,342

Software purchased Software generated Total 2022 $’000 $’000 $’000

Cost 3,817 11,661 15,478

Less: Accumulated amortisation (3,750) (11,661) (15,411) Carrying amount at end of period 67 - 67

Movement

Carrying amount at start of period 232 1,110 1,342 Amortisation expense (165) (1,110) (1,275) Carrying amount at end of period 67 - 67

Software purchased Software generated Total 2021 $’000 $’000 $’000

Cost 3,817 11,661 15,478

Less: Accumulated amortisation (3,585) (10,551) (14,136) Carrying amount at end of period 232 1,110 1,342

Movement

Carrying amount at start of period 500 4,431 4,931 Amortisation expense (268) (3,321) (3,589) Carrying amount at end of period 232 1,110 1,342

B8 TRADE AND OTHER PAYABLES

Current

2022 2021 $’000 $’000

Trade creditors 47,248 38,043

Accrued expenses 25,865 20,129

Payable funding expenses 35 3,005

Other payables 1,340 971

Total other current liabilities 74,488 62,148

Non-current

Other payables 1,361 2,213

Total non-current payables 1,361 2,213

Total payables 75,849 64,361

Trade creditors are recognised upon receipt of the goods or services ordered and are measured at the agreed purchase/contract price, gross of applicable trade and other discounts. Amounts owing are unsecured and are generally settled on 30-day terms.

Other payables are recognised as a result of a maintenance arrangement entered into in the purchase of two linear accelerator plant and equipment assets.

All payables are presented as current liabilities unless payment is not due within 12 months from the reporting date.

B9 OTHER LIABILITIES

Current

2022 2021 $’000 $’000

Contract liabilities 4,690 6,713

Unearned other revenue 1,851 69

Total other current liabilities 6,541 6,782

Disclosure – Contract liabilities

Contract liabilities arise from contracts with customers while other unearned revenue arise from transactions that are not contracts with customers.

B10 EQUITY

Note C10-1: Equity - contributed

2022 2021

$’000 $’000

Opening balance at beginning of year 537,104 576,449

Non-appropriated equity injections

Minor capital funding 16,085 26,620

Non-appropriated equity withdrawals

Non-cash depreciation funding returned to Department of Health as a contribution towards capital works program (62,687) (65,953)

Non-appropriated equity asset transfers 1,784 (12)

Net equity injections and equity withdrawals for the period 492,286 537,104

Equity contributions consist of cash funds provided for minor capital works $16.09m during 2022 ($26.62m during 2021) and assets transferred to the Townsville HHS $1.78m during 2022 (-$0.01m during 2021). Equity withdrawals represent the contribution towards the capital works program undertaken by the Department of Health on behalf of the Townsville HHS.

Capital for the Townsville HHS comprises accumulated surpluses and contributed equity. When managing capital, management’s objective is to ensure the entity continues as a going concern as well as to meet service delivery outcomes.

Note B10-2: Asset Revaluation Surplus

Land

2022 2021

$’000 $’000

Balance at the beginning of the financial year 29,682 30,137 Revaluation increments/(decrements) 788 (455) 30,470 29,682

Buildings

Balance at the beginning of the financial year 188,950 187,572 Revaluation increments/(decrements) 32,893 1,378 221,843 188,950

Balance at the end of the financial year 252,313 218,632

The asset revaluation surplus represents the net effect of revaluation movements in assets.

Note B11-1: Leases as a Lessee

Right-of-use assets

Buildings $’000

Balance at 30 June 2021 4,451

Additions 500

Depreciation expense (815)

Balance at 30 June 2022 4,136 Buildings $’000

Carrying amount at 1 July 2020 3,394 Additions 1,759

Depreciation expense (702)

Balance at 30 June 2021 4,451

Right-of-use assets

Right-of-use assets are initially recognised at cost comprising the following: x the amount of the initial measurement of the lease liability

x lease payments made at or before the commencement date, less any lease incentives received

x initial direct costs incurred, and x the initial estimate of restoration costs.

Right-of-use assets are subsequently depreciated over the lease term and be subject to impairment testing on an annual basis.

The carrying amount of right-of-use assets are adjusted for any remeasurement of the lease liability in the financial year following a change in discount rate, a reduction in lease payments payable, changes in variable lease payments that depend upon variable indexes/rates or a change in lease term.

Lease liabilities 2022 2021 $’000 $’000

Current

Lease liabilities 796 683

Non-current Lease liabilities 3,431 3,794

Total 4,227 4,477

The Townsville HHS measures right-of-use assets from concessionary leases at cost on initial recognition, and measures all rightof-use assets at cost subsequent to initial recognition.

The Townsville HHS has elected not to recognise right-of-use assets and lease liabilities arising from short-term leases and leases of low value assets. The lease payments are recognised as expenses on a straightline basis over the lease term. An asset is considered low value where it is expected to cost less than $10,000 when new.

Lease liabilities

Lease liabilities are initially recognised at the present value of lease payments over the lease term that are not yet paid. The lease term includes any extension or renewal options that the department is reasonably certain to exercise. The future lease payments included in the calculation of the lease liability comprise the following:

x fixed payments (including in-substance fixed payments), less any lease incentives receivable

x variable lease payments that depend on an index or rate, initially measured using the index or rate as at the commencement date

x amounts expected to be payable by the department under residual value guarantees

x the exercise price of a purchase option that the department is reasonably certain to exercise

x payments for termination penalties if the lease term reflects the early termination.

Disclosures – Leases as a lessee

(i) Details of leasing arrangements as lessee

Category/Class of Lease Arrangement

When measuring the lease liability, the Townsville HHS uses its incremental borrowing rate as the discount rate where the interest rate implicit in the lease cannot be readily determined, which is the case for all of the Townsville HHS’s leases. To determine the incremental borrowing rate, the Townsville HHS uses loan rates provided by Queensland Treasury Corporation that correspond to the commencement date and term of the lease.

Subsequent to initial recognition, the lease liabilities are increased by the interest charge and reduced by the amount of lease payments. Lease liabilities are also remeasured in certain situations such as a change in lease arrangement.

Description of Arrangement

Building leases Townsville Hospital and Health Service routinely enters into leases for housing and commercial space. Lease payments are subject to market rent reviews and/or CPI adjustments.

(ii) Office accommodation, employee housing and motor vehicles

The Department of Housing and Public Works (DHPW) and QFleet provides the Townsville HHS with access to office accommodation, employee housing and motor vehicles under government-wide frameworks. These arrangements are categorised as procurement of services rather than as leases because DHPW has substantive substitution rights over the assets. The related service expenses are included in Note B2-2.

(iii) Amounts recognised in profit or loss 2022 2021 $’000 $’000

Interest expense on lease liabilities 72 66

Breakdown of 'Lease expenses' included in Note [B2-2] Expenses relating to short-term leases 1,940 1,850 Expenses relating to QFleet 1,486 1,448

Income from subleasing included in 'Property rental' in Note [B1-4] (634) (519)

Notes about risks and other accounting uncertainties

C1 FAIR VALUE MEASUREMENT

Fair value is the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date under current market conditions (an exit price) regardless of whether the price is directly derived from observable inputs or estimated using another valuation technique.

Observable inputs are publicly available data that are relevant to the characteristics of the assets/liabilities being valued, and include, but are not limited to, published sales data for land.

Unobservable inputs are data, assumptions and judgements that are not available publicly, but are relevant to the characteristics of the assets/liabilities being valued.

Significant unobservable inputs used by the Townsville HHS include, but are not limited to, subjective adjustments made to observable data to take account of the specialised nature of health service buildings and on hospital-site residential facilities, including historical and current construction contracts (and/or estimates of such costs), and assessments of physical condition and remaining useful life. Unobservable inputs are used to the extent that sufficient relevant and reliable observable inputs are not available for similar assets/liabilities.

A fair-value measurement of a non-financial asset considers a market participant's ability to generate economic benefit by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

All assets and liabilities of the Townsville HHS for which fair value is measured or disclosed in the financial statements are categorised within the following fair value hierarchy, based on the data and assumptions used in the most recent specific appraisals:

x Level 1: represents fair value measurements that reflect unadjusted quoted market prices in active markets for identical assets and liabilities;

x Level 2: represents fair value measurements that are substantially derived from inputs (other than quoted prices included in level 1) that are observable, either directly or indirectly; and

x Level 3: represents fair value measurements that are substantially derived from unobservable inputs.

There were no transfers of assets between fair value hierarchy levels during the period.

Level 1 Level 2 Level 3 Total 2022 $’000 $’000 $’000 $’000

Assets

Land 59,964 59,964

Buildings - 1,853 685,305 687,158

Total assets 61,817 685,305 747,122

Level 1 Level 2 Level 3 Total 2021 $’000 $’000 $’000 $’000

Assets

Land 59,401 59,401

Buildings 1,746 683,247 684,993

Total assets 61,147 683,247 744,394

and

FINANCIAL RISK MANAGEMENT

A financial instrument is any contract that gives rise to both a financial asset of one entity and a financial liability or equity instrument of another entity. The Townsville HHS holds financial instruments in the form of cash, receivables and payables.

Recognition

Financial assets and financial liabilities are recognised in the Statement of Financial Position when the Townsville HHS becomes party to the contractual provisions of the financial instrument.

Classification

Financial instruments are classified and measured as follows:

x Cash and cash equivalents – held at fair-value

x Receivables – held at amortised cost

x Payables – held at amortised cost

Financial assets

The Townsville HHS does not enter into transactions for speculative purposes, or for hedging. Apart from cash and cash equivalents, the Townsville HHS holds no financial assets classified at fair-value through profit or loss.

The Townsville HHS is exposed to a variety of financial risks – credit risk, liquidity risk and market risk. The Townsville HHS holds the following financial instruments by category:

2022 2021 $’000 $’000

Cash and cash equivalents 66,262 62,085

Financial assets at amortised cost:

Trade and other receivables 7,647 9,323

Net GST input tax credits receivable 1,458 1,440

Total Financial Assets 75,367 72,848

Financial Liabilities

Financial liabilities at amortised cost - comprising:

Trade and other payables 75,849 64,361

Lease liabilities 4,227 4,477

Total Financial Liabilities 80,076 68,838

Risk management is carried out by senior finance executives under policies approved by the Townsville Hospital and Health Board. These policies include identification and analysis of the risk exposure of the Townsville HHS and appropriate procedures, controls and risk limits. Finance reports to the Board monthly.

Risk Exposure Measurement method

Credit risk Ageing analysis, cash inflows at risk Liquidity risk Monitoring of cash flows by management for short term obligations

Market risk Interest rate sensitivity analysis

(a) Credit Risk

Credit risk is the potential for financial loss arising from a counterparty defaulting on its obligations. The maximum exposure to credit risk at balance date is equal to the gross carrying number of receivables, inclusive of any allowance for impairment. The carrying number of receivables represents the maximum exposure to credit risk.

Credit risk on cash deposits is considered minimal given all Townsville HHS deposits are held by the State through Queensland Treasury Corporation and the Commonwealth Bank of Australia and, as such, any reasonable change to trading terms has been assessed not to have a material impact on the Townsville HHS.

The Townsville HHS considers ineligible debtors to have a significantly increased credit risk and measures the loss allowance of such assets at lifetime expected credit losses by debt type.

Ageing of past due but not impaired as well as impaired financial assets are disclosed in Note B4-1.

(b) Liquidity risk

Liquidity risk is the risk that the Townsville HHS will not have the resources required at a time to meet its obligations to settle its financial liabilities.

The Townsville HHS is exposed to liquidity risk through its trading in the normal course of business. The Townsville HHS aims to reduce the exposure to liquidity risk by ensuring that sufficient funds are available to meet employee and supplier obligations always.

The Townsville HHS has an approved overdraft facility of $7.5 million under whole-of-government banking arrangements to manage any short-term cash shortfall. As at 30 June 2022, the Townsville HHS had not drawn down on this facility.

(c) Market risk

The Townsville HHS is not exposed to fluctuations in market prices; market-risk exposure is limited to interest-rate risk.

Townsville HHS’s only interest-rate risk exposure is on its 24-hour call deposits, which are limited to the balance as disclosed in Note B3.

The impact of a reasonably possible change in interest rates has been assessed not to have a material impact on the Townsville HHS.

(d) Fair value measurement

Cash and cash equivalents are measured at fair value. All other financial assets or liabilities are measured at amortised cost less any allowance for impairment, which given the short-term nature of these assets, is assumed to represent fair value.

C3 CONTINGENCIES

(a) Litigation in Progress

As at 30 June 2022, the following cases were filed in the courts naming the State of Queensland acting through the Townsville Hospital and Health Service as defendant:

No. of cases

New Cases Completed Cases 2021 No. of cases

Court

Medical Indemnity (formerly Health Litigation)

General Liability

40 25 66

3 1 5

2 2

43 26 73

Health litigation is underwritten by the Queensland Government Insurance Fund. The Townsville HHS’s liability in this area is limited to an excess per insurance event of $ 20,000 for health litigation claims and $10,000 for General Liability and Property claims.

The Townsville HHS’s legal advisers and management believe it would be misleading to estimate the final amounts payable (if any) in respect of the litigation before the courts at this time, but do not anticipate that the amount would exceed $ 1.71 m ( 2021: $1.39 m), being the upmost deductible amount being payable, based on the claims reflected above.

C4 COMMITMENTS

Commitments for capital expenditure at reporting date (inclusive of non-recoverable GST input tax credits) are payable:

2022 2021 $’000 $’000

Capital expenditure commitments

Committed at reporting date but not recognised as liabilities, payable:

Property, plant and equipment 8,218 5,474 8,218 5,474

reporting disclosures

D1 BUDGETARY REPORTING DISCLOSURES

In accordance with Accounting Standard AASB 1055, explanations of major variances between actual amounts presented in the financial statements against that of 2021-2022 budgets are disclosed below.

a) Statement of comprehensive income

Statement of comprehensive income

Materiality for Notes commentary is based on the calculation of the line item’s actual value percentage of the group total. If the percentage is greater than 5 per cent and $1 million, the line item variance from budget to actual is deemed material.

Original Budget 2022 Actual 2022 Variance Variance Notes

$’000 $’000 $’000 % Income

User charges 85,221 95,671 10,450 12.26% (a)

Funding for public health services 1,006,831 1,076,953 70,122 6.96% (b)

Grants and other contributions 32,289 35,170 2,881 8.92% (c)

Other revenue 4,825 4,586 (239) -4.95%

Total revenue 1,129,166 1,212,380 83,214

Expenses

Employee expenses (135,980) (153,320) (17,340) 12.75% (d) Health Service employee expenses (633,083) (669,836) (36,753) 5.81% (d)

Supplies and services (273,746) (308,633) (34,887) 12.74% (e)

Grants and subsidies (279) (113) 166 -59.50%

Interest on lease liabilities (72) (72) -100.00%

Depreciation and amortisation (62,783) (62,687) 96 -0.15%

Impairment losses on financial assets (1,760) (2,930) (1,170) 66.48% (f)

Other expenses (21,535) (12,890) 8,645 -40.14% (g)

Total expenses (1,129,166) (1,210,481) (81,315)

Operating result for the year 1,899 1,899

Other comprehensive income

Items that will not be reclassified subsequently to profit or loss

Increase/(decrease) in asset revaluation surplus 33,681 33,681

Other comprehensive income for the year - 33,681 33,681

Total comprehensive income for the year 35,580 35,580

Major variances between 2021-2022 budget and 2021-2022 actual amounts include

a. The increase in User charges is principally due to the continued improvement in own source revenue processes, including increases in revenue from inpatient revenue ($3.3 million), outpatient revenue ($1.8 million), non-patient income inclusive of Pharmaceutical Benefit Scheme (PBS) cost recovery revenue ($4.87million) and Inter-entity sales recoveries ($6.9 million).

b. The increase in Funding for public health services is due to COVID-19 response operations funded pursuant to the National Partnership Agreement, whereby funding is provided post-budget on a cost recovery basis ($40.9 million) and additional post-budget funding being provided through in-year amendments to the Service Agreement for the delivery of increased public hospital and health services such as Endovascular Clot Retrieval and expanded Renal Services funding.

c. Grants and other contributions were favourable to budget by $2.9 million, due to an increase in corporate services support from the Department received below fair value ($0.4 million), and the receipt of Australian Government - Specific purpose recurrent grants received ($1.6 million).

d. The increase in employee expenses reflects the additional expenses related to COVID-19 response operations of $22.9 million and additional employee expense associated with in-year amendments to the Service Agreement for the delivery of increased public hospital and health services.

e. Supplies and services expense relates to COVID-19 response operations of $16.7 million including clinical supplies, personal protective equipment, vaccination clinics etc., increased costs associated with increased public hospital and health services and the increased cost of goods and services consumed due to cost increases associated with supply chain constraints and above consumer price index price movements. Increased expenditure on non-capital related costs combined with minor works is offset on a cost recovery basis by Inter-entity sales through the asset and equipment replacement programs.

f. Impairment losses on financial assets were over budget by $1.2 million due to an increased amount of ineligible inpatient write offs and impaired debts in accordance with AASB 9

g. The decrease in Other expenses of $8.6 million is due to end of financial year technical adjustments for activity and program related funding in accordance with AASB 1058.

Statement

Assets

Current assets

Original Budget 2022 Actual 2022 Variance Variance Notes

Cash and cash equivalents 54,890 66,262 11,372 20.72% (a)

Trade and other receivables 13,492 9,105 (4,387) -32.52% (a)

Inventories 9,849 10,012 163 1.65%

Other assets 2,686 21,911 19,225 715.75% (b)

Total current assets 80,917 107,290 26,373

Non-current assets

Employee expenses 832,995 805,500 (27,495) 3.30% (c)

Health Service employee expenses 4,136 4,136 100.00% (c)

Supplies and services 67 67 100.00% (c)

Total expenses 832,995 809,703 (23,292)

Total assets 913,912 916,993 3,081

Liabilities

Current liabilities

Trade and other payables 57,240 74,488 17,248 30.13% (b)

Lease Liability 2,850 796 (2,054) -72.07% (b)

Accrued employee benefits 5,632 2,499 (3,133) -55.63% (d)

Other liabilities 617 6,541 5,924 960.13% (e)

Total current liabilities 66,339 84,324 17,985

Non-current liabilities

Trade and other payables 1,361 1,361 100.00% (b)

Lease liabilities 3,431 3,431 100.00% (b)

Total non-current liabilities 4,792 4,792

Total liabilities 66,339 89,116 22,777

Net assets 847,573 827,877 (19,696)

EQUITY

Contributed 518,340 492,286 (26,054) -5.03% (g)

Asset revaluation surplus 252,336 252,313 (23) -0.01%

Accumulated surpluses 76,897 83,278 6,381 8.30% (h)

Total equity 847,573 827,877 (19,696)

Major variances between 2021-2022 budget and 2021-2022 actual amounts include

a. The increase is principally due to the actual closing balance in the 2020-2021 audited financial statement balance for cash and cash equivalent and payables being higher than the original budget estimate and the increased realisation of receivables as cash and cash equivalents and increase in payables in-year.

b. Other assets and trade and other payables balances (current and non-current) includes the funding receivable and payable from the Department for assessments of revenue classified under AASB 15 and AASB 1058 respectively while budget was based on service agreement funding only. Other payables reflect an amount recognised as a result of a maintenance agreement arrangement entered into with the purchase of two linear accelerator plant and equipment assets, totalling $2.7m. The budget allocation for Lease liabilities was included in Trade and other payables.

c. Property, plant and equipment variance is due to the timing of capital program expenditure. The budget allocation for Right of use assets and Intangible assets was included in property, plant and equipment.

d. The Accrued employee benefits budget variance is due to the timing of the payroll payment run with the period end accrual of 6 days.

e. Other liabilities include revenue received in advance funding not budgeted in year.

f. The Contributed equity accumulation reflects the timing of the expected capital program completion and actual associated funding.

g. The variance of accumulated surplus’ against budget is due to profits year on year realised.

Statement of cash flows

Original Budget 2022 Actual 2022 Variance Variance Notes $’000 $’000 $’000 %

Cash flows from operating activities

User charges 95,004 96,398 1,394 1.47%

Funding for public health services 995,104 1,004,256 9,152 0.92%

Grants and other contributions 23,407 34,871 11,464 48.98% (a)

Interest received 450 128 (322) -71.56%

Other revenue 20,306 4,211 (16,095) -79.26% (b)

Employee expenses (135,980) (147,235) (11,255) 8.28% (c)

Health Service Employee expense (633,161) (637,058) (3,897) 0.62%

Supplies and services (287,696) (334,663) (46,967) 16.33% (d)

Grants and subsidies (279) 279 -100.00%

Interest payments on lease liabilities (72) (72) 100.00%

Other expenses (12,653) (12,909) (256) 2.02%

Net cash from/(used by) operating activities 64,502 7,927 (56,575)

Cash flows from operating activities

User charges (19,085) (19,085) 100.00% (e)

Funding for public health services 20 (20) -100.00%

Net cash from/(used by) investing activities 20 (19,085) (19,105)

Cash flows from financing activities

Proceeds from equity injections 392 16,085 15,693 4003.32% (f)

Lease payments (674) (750) (76) 11.28%

Proceeds from equity withdrawals (62,783) 62,783 -100.00% (g)

Net cash from/(used by) financing activities (63,065) 15,335 78,400

Net increase/(decrease) in cash held 1,457 4,177 2,720

Cash and cash equivalents at the beginning of the financial year 53,433 62,085 8,652

Cash and cash equivalents at the end of the financial year 54,890 66,262 11,372

Major variances between 2021-2022 budget and 2021-2022 actual amounts include

a. Grants and contributions variance reflects the variance between budgeted and actual opening and closing balances resulting from end of year adjustments in line with AASB 15 and AASB 1058.

b. The budget overstates the expected cash flow from other revenue as it incorporates the rolled over opening trust balances relating to Trust and Research, which do not generate a cash flow in year.

c. Employee expenses variance reflects post-budget additional employee costs attributable to COVID-19 response operations and in-year amendments to the Service Agreement for the delivery of increased public hospital and health services.

d. Supplies and Services variance principally relates to COVID-19 response operations including clinical supplies, personal protective equipment, vaccination clinics etc., increased costs associated with increased public hospital and health services and the increased cost of goods and services consumed due to supply chain constraints and above consumer price index price movements.

e. The Payments for Property, plant and equipment variance relates to the Department holding the budget for Department funded capital acquisitions / projects. Townsville HHS pays for all capital acquisitions / projects and is reimbursed by the Department on a cost recovery basis in arrears. Acquisitions / projects include Sustaining Capital and Health Technology Equipment Replacement programs.

f. The Proceeds from equity injections variance relates to the Department holding the budget for Department funded acquisitions / projects. The Townsville HHS pays for the capital acquisitions / projects and is reimbursed on a cost recovery basis by the Department in arrears.

g. The Proceeds from equity withdrawals variance relates to depreciation and amortisation funding being treated as a cash item (equity withdrawal) in the budget, however depreciation and amortisation funding is a non-cash adjustment.

What

E1 PATIENT TRUST FUNDS

Patient Trust receipts and payments

Receipts

Amounts receipted on behalf of patients 9,878 7,834

Total receipts 9,878 7,834

Payments

Amounts paid to or on behalf of patients (7,941) (8,471)

Total payments (7,941) (8,471)

Trust assets and liabilities

Assets

Current asset beginning of year 4,907 5,544

Movement in trust monies invested in QTC 3,066

Total assets 9,910 4,907

Patient Trust

The Townsville HHS is responsible for the efficient, effective and accountable administration of patients’ monies. Patients’ monies/ properties are held in a fiduciary capacity for the benefit of the patient to whom the duty is owed.

Patients’ monies do not represent resources controlled by the Townsville HHS. These monies are received and held on behalf of patients and, as such, do not form part of the assets recognised by the Townsville HHS.

The Townsville HHS acts in a trust capacity in relation to patient trust accounts. Although patient funds are not controlled by the Townsville HHS, trust activities are included in the audit performed annually by the Auditor-General of Queensland.

2022 2021 $’000 $’000

Study Education and Research Trust

Revenue 837 1,259

Education and professional development (48) (255)

Travel (7) (1)

Equipment (3) (14)

Research grants and expenses (925) (1,044)

Total Payments (983) (1,314)

Surplus/(Deficit) for the year (146) (55)

Current asset beginning of year 10,206 10,261

Current asset end of year 10,060 10,206

Plus: Amounts held in other trusts 2,799 3,320

Total General Trust Funds 12,859 13,526

Restricted Assets

General Trust transactions incorporate monies received through fundraising activities, donations, and bequests which are held by the Townsville HHS for a stipulated purpose as well as cash contributions arising from the Right of Private Practice arrangements that are specified for study, education and research activities.

The General Trust fund includes Study Education and Research Trust Account (SERTA) as disclosed in this table. Under the MOCA 5 Granted Private Practice Revenue Retention arrangement, service-retention amounts generated by doctors after reaching the threshold allowable under the retention arrangement are held in trust for specific purposes of study, education and research activities.

General Trust Funds are managed on an accrual basis and form part of the annual general-purpose financial statements. This money is controlled by the Townsville HHS and forms part of the cash and cash equivalents balance (refer to Note B3); however, it is restricted as it can only be used for specific purposes. At 30 June 2022 amounts of $12,859,000. (2021: $13,526,000) are set aside for the specified purpose of the underlying contribution.

Given that funds generated from private practice arrangements are reflected in the Statement of Comprehensive Income when the services are rendered, the timing of SERTA expenditure can impact on the overall Townsville HHS operating result. For instance, a positive financial impact will result when SERTA revenue exceeds SERTA expenditure during any given financial year. Conversely, a negative financial impact will result when SERTA expenditure exceeds SERTA revenue during any given financial year.

PROVISION OF PUBLIC INFRASTRUCTURE BY OTHER ENTITIES

The Department of Health, prior to the establishment of the Townsville HHS, had entered into several contractual arrangements with private sector entities for the construction and operation of public infrastructure facilities for a period of time on land now controlled by the Townsville HHS (Public Private Partnership (PPP) arrangements).

Although the land on which the facilities have been constructed remains an asset of the Townsville HHS, the Townsville HHS does not control the facilities with these arrangements. Therefore, these facilities are not recorded as assets. The Townsville HHS received rights and incurs obligations under these arrangements including:

a. rights and obligations to receive and pay cash flows in accordance with the respective contractual arrangements and

b. rights to receive the facilities at the end of the contractual term.

The arrangements have been structured to minimise risk exposure for the Townsville HHS. The Townsville HHS has not recognised any rights or obligations that may attach to those arrangements.

Public Private Partnership arrangements operating during the financial year are as follows:

Medilink

The developer has constructed an administrative and retail complex on the site at Townsville University Hospital. Land rental of $36,000 per annum, escalated for CPI annually will be received from the facility owner up to January 2042. The facility owner operates and maintains the facility at its sole cost and risk. Estimated net rent receivable to 2042 is $1,168,050 (2021: $1,213,050)

Goodstart Early Learning Centre

The developer has constructed a childcare facility on the site at Townsville University Hospital. Land rental of $14,000 per annum, escalated for CPI annually will be received from the facility owner up to February 2044. The facility owner operates and maintains the facility at its sole cost and risk. Estimated net rent receivable to 2042 is $467,188 (2021: $483,188).

In accordance with the relevant provisions of the contractual arrangements, the ownership of the buildings transfers to Townsville HHS at no cost to the Townsville HHS at the expiry of the contractual arrangements.

information

F1 KEY MANAGEMENT PERSONNEL AND REMUNERATION

Key management personnel (KMP) are those persons having authority and responsibility for planning, directing, and controlling the activities of the Townsville HHS, directly or indirectly, including any director of the Townsville HHS. The following persons were considered key management personnel of the Townsville HHS during the current financial year:

Key management personnel and remuneration disclosures are made in accordance with Section 5 of the Financial Reporting Requirements for Queensland Government Agencies issued by Queensland Treasury. The Townsville HHS’s responsible Minister, the Hon Yvette D’Ath MP, is identified as part of the Townsville HHS’s KMP, consistent with the additional guidance included in the revised version of AASB 124 Related Party Disclosures.

Position Name

Chair of Townsville Hospital and Health Board (Townsville HHB) and Chair of Townsville HHB Executive Committee

Tony Mooney AM

Deputy Chair Townsville HHB and Chair of Townsville HHB Finance Committee Michelle Morton

Board Member Townsville HHB and Chair of Townsville HHB Audit and Risk Committee Debra Burden

Board Member Townsville HHB Christopher Castles

Board Member Townsville HHB Luke Guazzo

Board Member Townsville HHB Nicole Hayes

Board Member Townsville HHB Danette Hocking

Board Member Townsville HHB and Chair of Townsville HHB Stakeholder Engagement Committee

Board Member Townsville HHB and Chair of Townsville HHB Stakeholder Engagement Committee

Professor Ajay Rane OAM

Robert ‘Donald’ Whaleboat

Board Member Townsville HHB Georgina Whelan

Contract classification and appointment authority Initial Appointment date

Hospital and Health Boards Act 2011 Tenure: 18/05/2020 - 31/03/2024 18/05/2016

Hospital and Health Boards Act 2011 Tenure: 18/05/2019 - 17/05/2021 Tenure: 10/06/2021 - 31/03/2024 29/06/2012

Hospital and Health Boards Act 2011 Tenure: 18/05/2020 - 31/03/2024 18/05/2016

Hospital and Health Boards Act 2011 Tenure: 18/05/2019 - 31/03/2022 18/05/2016

Hospital and Health Board Act 2011 Tenure: 01/04/2022 - 31/03/2026 1/04/2022

Hospital and Health Boards Act 2011 Tenure: 18/05/2020 - 31/03/2024 18/05/2019

Hospital and Health Boards Act 2011 Tenure: 18/05/2019 - 31/03/2026 18/05/2019

Hospital and Health Boards Act 2011 Tenure: 18/05/2020 - 31/03/2024 18/05/2017

Hospital and Health Boards Act 2011 Tenure: 18/05/2019 – 31/03/2024 27/07/2012

Hospital and Health Boards Act 2011 Tenure: 18/05/2020 - 31/03/2024 18/05/2019

Position Name Contract classification and appointment authority Initial Appointment date

Health Service Chief Executive - responsible for the strategic direction and the efficient, effective and economic administration of the health service.

Chief Operating Officer - responsible for the efficient operation of the health service providing strategic leadership and direction for the Townsville HHS service delivery.

Chief Finance Officer - responsible for strategic leadership and direction over the efficient, effective and economic financial administration of the Townsville HHS.

Interim Chief Finance Officer - responsible for strategic leadership and direction over the efficient, effective and economic financial administration of the Townsville HHS

Chief Finance Officer - responsible for strategic leadership and direction over the efficient, effective and economic financial administration of the Townsville HHS

Executive Director Aboriginal and Torres Strait Islander Health - provides strategic oversight and operational leadership for indigenous liaison, workforce management and cultural practices.

Executive Director Clinical Governance - provides strategic oversight of the safety and quality functions across the Townsville HHS.

Executive Director Digital Health and Knowledge Management - responsible for providing strategic and operational leadership of Health and Knowledge resources for Townsville HHS.

Executive Director Allied Health - provides professional leadership for all allied health practitioners, including professional governance, credentialing, education and research for Townsville HHS.

Executive Director Corporate and Strategic Governance - provides effective leadership, design and implementation of strategic planning and governance initiatives to enhance informed decision making of the Townsville HHS.

Executive Director Nursing and Midwifery Servicesresponsible for providing strategic and operational leadership of nursing and midwifery services of the Townsville Hospital and Health Service. Executive COVID-19 Lead.

Acting Executive Director Nursing and Midwifery Services - responsible for providing strategic and operational leadership of nursing and midwifery services of the Townsville HHS.

Chief Medical Officer - responsible for providing strategic and operational leadership of medical service delivery of the Townsville HHS.

Kieran Keyes

Stephen Eaton

Matthew Rooney

Malcolm Wilson

Anthony Mathas

S24/S70 01 Hospital and Health Boards Act 2011 13/11/2017

HES3-2 01 Hospital and Health Boards Act 2011 12/11/2018

HES3-1 01 Hospital and Health Boards Act 2011 Tenure: 03/07/2019 - 22/12/2021 3/07/2019

HES3-1 01 Hospital and Health Boards Act 2011 Tenure: 11/01/2022 - 13/05/2022 11/01/2022

HES3-1 01 Hospital and Health Boards Act 2011 16/05/2022

Wendy Ah Chin

Marina Daly

Louise Hayes

Danielle Hornsby

HES2-3 01 Hospital and Health Boards Act 2011 30/08/2021

HES2-3 01 Hospital and Health Boards Act 2011 12/11/2019

HES2-3 01 Hospital and Health Boards Act 2011 11/03/2019

HP8-3 01 Health Practitioners and Dental Officers (Queensland Health) Award – State 2015 13/11/2017

Sharon Kelly

HES2-4 01 Hospital and Health Boards Act 2011 9/04/2018

Judith Morton

NRG13-2 01 Hospital and Health Boards Act 2011 1/12/2014

Katrina Roberts

Dr Niall Small

NRG13-2 01 Hospital and Health Boards Act 2011 Tenure: 31/01/2022 - 30/09/2022 31/01/2022

MMO14 01 Hospital and Health Boards Act 2011 17/02/2020

Ministerial remuneration entitlements are outlined in the Legislative Assembly of Queensland’s Members’ Remuneration Handbook. The Townsville HHS does not bear any cost of remuneration of Ministers. Most Ministerial entitlements are paid by the Legislative Assembly, with the remaining entitlements being provided by Ministerial Services Branch within the Department of the Premier and Cabinet. As all Ministers are reported as KMP of the Queensland Government, aggregate remuneration expenses for all Ministers is disclosed in the Queensland General Government and Whole-of-Government Consolidated Financial Statements, which are published as part of Queensland Treasury’s Report on State Finances.

The Townsville Hospital and Health Service is independently and locally controlled by the Hospital and Health Board (the Board). The Board appoints the Health Service Chief Executive and exercises significant responsibilities at a local level, including controlling the financial management of the Townsville HHS and the management of the Townsville HHS land and buildings (section 7 Hospital and Health Board Act 2011). Remuneration arrangements for the Townsville HHS Board are approved by the Governor in Council and the chair, deputy chair and members are paid an annual fee consistent with the government procedures titled ‘Remuneration procedures for part-time chairs and members of Queensland Government bodies’.

Remuneration policy for the Townsville HHS’s other KMP is set by the Queensland Public Service Commission as provided for under the Public Service Act 2008 and the Industrial Relations Act 2016 Individual remuneration and other terms of employment (including motor vehicle entitlements and performance payments if applicable) are specified in employment contracts.

Remuneration expenses for those KMP comprise the following components:

Short-term employee expenses, including:

x salary, allowances and leave entitlements earned and expensed for the entire year, or for that part of the year during which the employee occupied a KMP position;

x performance payments recognised as an expense during the year; and

x non-monetary benefits – consisting of provision of vehicle together with fringe benefits tax applicable to these benefits.

Long-term employee expenses include amounts expensed in respect of long service leave entitlements earned.

Post-employment expenses include amounts expensed in respect of employer superannuation obligations.

Termination benefits include payments in lieu of notice on termination and other lump sum separation entitlements (excluding annual and long service leave entitlements) payable on termination of employment or acceptance of an offer of termination of employment.

Short- term benefits

2022

employment

benefits Termination benefits TotalMonetary Nonmonetary

$’000 $’000

Tony Mooney AM 102 10 112

Michelle Morton 55 9 5 69

Debra Burden 55 9 5 69

Christopher Castles 41 8 5 54

Luke Guazzo 14 3 17

Nicole Hayes 51 5 56

Danette Hocking 51 5 56

Professor Ajay Rane OAM 55 5 60

Robert Whaleboat 55 5 60

Georgina Whelan 51 9 5 65

Kieran Keyes 384 9 44 9 446

Stephen Eaton 232 9 23 5 269

Matthew Rooney 106 9 10 2 1 128

Malcolm Wilson 83 31 8 2 124

Anthony Mathas 31 6 3 1 41

Wendy Ah Chin 176 18 4 198

Marina Daly 208 9 17 5 239

Louise Hayes 206 9 21 5 241

Danielle Hornsby 211 9 23 5 248

Sharon Kelly 206 9 20 5 240

Judith Morton 279 9 28 6 322

Katrina Roberts 119 5 10 3 137

Dr Niall Small 616 51 14 681

Short- term benefits

TotalMonetary

$’000

Tony Mooney AM 103 10 113

Michelle Morton 49 9 5 63

Debra Burden 55 9 5 69

Christopher Castles 58 3 5 66

Nicole Hayes 51 5 56

Danette Hocking 51 5 56

Robert Whaleboat 55 5 60

Georgina Whelan 51 9 5 65

Professor Ajay Rane OAM 54 5 59

Kieran Keyes 356 9 37 8 410

Stephen Eaton 239 9 24 5 277

Matthew Rooney 215 9 22 5 251

Marina Daly 207 9 16 4 236

Sam Galluccio 132 8 11 3 154

Louise Hayes 204 9 20 4 237

Danielle Hornsby 197 9 22 4 232

Sharon Kelly 204 9 20 4 237

Dallas Leon 177 9 17 4 207

Judith Morton 251 9 25 4 289

Dr Niall Small 604 8 48 13 673

F2 RELATED PARTY TRANSACTIONS

Transactions with people/entities related to KMP

Any transactions in the year ended 30 June 2022 between the Townsville Hospital and Health Service and key management personnel, including the people/entities related to key management personnel were on normal commercial terms and conditions and were immaterial in nature.

Entity – Department of Health

Transactions with other Queensland Governmentcontrolled entities

The Townsville Hospital and Health Service is controlled by its ultimate parent entity, the state of Queensland. All State of Queensland controlled entities meet the definition of a related party in AASB 124 Related Party Disclosures. The following table summarises significant transactions with Queensland Government controlled entities.

2022 2021 $’000 $’000

Revenue 710,929 663,553

Expenditure 106,656 96,176

Asset 12,780 5,753

Liability 47,380 40,160

Entity – Department of Housing and Public Works including QFleet

Expenditure 3,375 3,206

Liability

Department of Health

The Townsville HHS’s primary source of funding is provided by the Department of Health, with payments made in accordance with a service agreement. The signed service agreements are published on the Queensland Government website and are publicly available. Revenue under the service agreement was $710.93million for the year ended 30 June 2022 (2021: $663.55million). For further details on the purchase of health services by the Department refer to Note B1-2

The Department of Health centrally manages, on behalf of hospital and health services, a range of services including pathology testing, pharmaceutical drugs, clinical supplies, patient transport, telecommunications and technology services. These services are provided on a cost recovery basis. In 2022, these services totalled $106.66 million (2021: $96.18million). In addition, the Townsville HHS receives corporate services support from the Department at no cost. Corporate services received include payroll services, financial transactions services (including accounts payable and banking services), administrative services and information technology services. In 2022 the fair value of these services was $9.32 million (2021: $8.94million).

Any associated receivables or payables owing to the Department of Health at 30 June 2022 are included in the balances within Note B4, Note B6, Note B8 and Note B9 and separately disclosed in the table above.

The Department of Heath also provides funding from the State as equity injections to purchase property, plant and equipment. All construction of major health infrastructure is managed and funded by the Department of Health. Upon practical completion of a project, assets are transferred from the Department to the Townsville HHS. Throughout the year, funding received to cover the cost of depreciation is offset by a withdrawal of equity by the State for the same amount. For further details on equity transactions with the Department refer to the Statement of Changes in Equity.

Department of Housing and Public Works (including QFleet)

Department of Housing and Public Works – Townsville HHS pays rent to the Department of Housing and Public Works for several properties. In addition, the Townsville HHS pays the Department of Housing and Public Works for vehicle fleet management services.

There are no material transactions with other Queensland Government controlled entities.

Queensland Treasury Corporation

The Townsville Hospital and Health Service holds cash investments with Queensland Treasury Corporation (QTC) in relation to trust monies which are outlined in (Note E1 and Note E2).

F3 TAXATION

The Townsville Hospital and Health Service is exempted from income tax under the Income Tax Assessment Act 1936 and is exempted from other forms of Commonwealth taxation except for Fringe Benefits Tax (FBT) and Goods and Service Tax (GST)

All FBT and GST reporting to the Commonwealth is managed centrally by the Department of Health, with payments/receipts made on behalf of Townsville HHS reimbursed to/from the Department monthly. GST credits receivable from, and GST payable to the ATO, are recognised on this basis.

Both the Townsville Hospital and Health Service and the Department of Health satisfy section 149-25(e) of the A New Tax System (Goods and Services) Act 1999 (Cth) (the GST Act). Consequently, they were able with other hospital and health services, to form a “group” for GST purposes under Division 149 of the GST Act. Any transactions between the members of the “group” do not attract GST.

Revenues and expenses are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the ATO. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of an item of expense. Receivables and payables in the Statement of Financial Position are shown inclusive of GST.

F4 FIRST-YEAR APPLICATION OF NEW STANDARDS OR CHANGE IN POLICY

Accounting standards applied for the first time

No new accounting standards or interpretations that apply to the department for the first time in 2021-2022 had any material impact on the financial statements.

Accounting standards early adopted

No Australian Accounting Standards have been early adopted for 2021-2022

F5 SUBSEQUENT EVENTS

No matter or circumstance has arisen since 30 June 2022 that has significantly affected, or may significantly affect the Townsville HHS’s operations, the results of those operations, or the Townsville HHS’s future in financial years.

F6 COVID-19

Significant Financial Impacts – COVID-19 Pandemic

The following significant transactions were recognised by the Townsville HHS during 2021-2022 financial year in response to the COVID-19 pandemic.

Significant revenue transactions arising from COVID-19

2022 2021 $’000 $’000

Additional revenue received to fund COVID-19 public health services initiative 40,866 18,456

2021 COVID-19 funding received is inclusive of COVID-19 recovery of operational expenses of $28.91m (2021: $11.69m).

F7 CLIMATE RISK

The Townsville HHS has not identified any material climate related risks relevant to the financial statements at the reporting date, however constantly monitors the emergence of such risks under the Queensland Government’s Climate Transition Strategy.

These general-purpose financial statements have been prepared pursuant to Section 62(1) of the Financial Accountability Act 2009 (the Act), Section 39 of the Financial and Performance Management Standard 2019 and other prescribed requirements. In accordance with Section 62(1)(b) of the Act we certify that in our opinion:

a. the prescribed requirements for establishing and keeping the accounts have been complied with in all material respects; and

b. the financial statements have been drawn up to present a true and fair view, in accordance with prescribed accounting standards, of the transactions of Townsville Hospital and Health Service for the financial year ended 30 June 2022 and of the financial position of the Townsville Hospital and Health Service at the end of the year.

We acknowledge responsibility under Section 7 and Section 11 of the Financial and Performance Management Standard 2019 for the establishment and maintenance, in all material respects, of an appropriate and effective system of internal controls and risk management processes with respect to financial reporting throughout the reporting period.

Tony Mooney AM

Board Chair

Townsville Hospital and Health Service

Date: 15/08/2022

Anthony Mathas

Chief Finance Officer

Townsville Hospital and Health Service

Date: 15/08/2022

Kieran Keyes

Health Service Chief Executive

Townsville Hospital and Health Service

Date: 15/08/2022

Queensland

Audit

Better public services

INDEPENDENT AUDITOR’S REPORT

To the Board of Townsville Hospital and Health Service

Report on the audit of the financial report Opinion

I have audited the accompanying financial report of Townsville Hospital and Health Service.

In my opinion, the financial report:

a. gives a true and fair view of the entity's financial position as at 30 June 2022, and its financial performance and cash flows for the year then ended

b. complies with the Financial Accountability Act 2009, the Financial and Performance Management Standard 2019 and Australian Accounting Standards.

The financial report comprises the statement of financial position as at 30 June 2022, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, notes to the financial statements including summaries of significant accounting policies and other explanatory information, and the management certificate.

Basis for opinion

I conducted my audit in accordance with the Auditor-General Auditing Standards, which incorporate the Australian Auditing Standards. My responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of my report.

I am independent of the entity in accordance with the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to my audit of the financial report in Australia. I have also fulfilled my other ethical responsibilities in accordance with the Code and the Auditor-General Auditing Standards

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Key audit matters

Key audit matters are those matters that, in my professional judgement, were of most significance in my audit of the financial report of the current period. I addressed these matters in the context of my audit of the financial report as a whole, and in forming my opinion thereon, and I do not provide a separate opinion on these matters.

Valuation of specialised buildings ($1.476 billion)

Refer to Note B7 in the financial report.

Key audit matter

Buildings were material to Townsville Hospital and Health Service at balance date and were measured at fair value using the current replacement cost method.

Townsville Hospital and Health Service performed a comprehensive revaluation of approximately 37% of its building assets this year as part of the rolling revaluation program. All other buildings were assessed using relevant indices.

The current replacement cost method comprises:

x gross replacement cost, less

x accumulated depreciation

Townsville Hospital and Health Service derived the gross replacement cost of its buildings at balance date using unit prices that required significant judgements for:

x identifying the components of buildings with separately identifiable replacement costs

x developing a unit rate for each of these components, including:

estimating the current cost for a modern substitute (including locality factors and oncosts), expressed as a rate per unit (e.g. $/square metre)

identifying whether the existing building contains obsolescence or less utility compared to the modern substitute, and if so estimating the adjustment to the unit rate required to reflect this difference.

The measurement of accumulated depreciation involved significant judgements for determining condition and forecasting the remaining useful lives of building components.

The significant judgements required for gross replacement cost and useful lives are also significant judgements for calculating annual depreciation expense.

Using indexation required:

x significant judgement in determining changes in cost and design factors for each asset type since the previous revaluation

x reviewing previous assumptions and judgements used in the last comprehensive valuation to ensure ongoing validity of assumptions and judgements used.

How my audit addressed the key audit matter

My procedures included, but were not limited to:

x assessing the adequacy of management's review of the valuation process and results

x reviewing the scope and instructions provided to the valuer

x assessing the appropriateness of the valuation methodology and the underlying assumptions with reference to common industry practices.

x assessing the appropriateness of the components of buildings used for measuring gross replacement cost with reference to common industry practices

x assessing the competence, capabilities and objectivity of the experts used to develop the models

x for unit rates, on a sample basis, evaluating the relevance, completeness and accuracy of source data used to derive the unit rate of the: modern substitute (including locality factors and oncosts)

adjustment for excess quality or obsolescence. evaluating the relevance and appropriateness of the indices used for changes in cost inputs by comparing to other relevant external indices

x Evaluating useful life estimates for reasonableness by: - reviewing management's annual assessment of useful lives at an aggregated level, reviewing asset management plans for consistency between renewal budgets and the gross replacement cost of assets

- testing that no building asset still in use has reached or exceeded its useful life enquiring of management about their plans for assets that are nearing the end of their useful life reviewing assets with an inconsistent relationship between condition and remaining useful life.

Where changes in useful lives were identified, evaluating whether the effective dates of the changes applied for depreciation expense were supported by appropriate evidence.

Responsibilities of the entity for the financial report

The Board is responsible for the preparation of the financial report that gives a true and fair view in accordance with the Financial Accountability Act 2009, the Financial and Performance Management Standard 2019 and Australian Accounting Standards, and for such internal control as the Board determines is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error.

The Board is also responsible for assessing the entity's ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless it is intended to abolish the entity or to otherwise cease operations.

Auditor’s responsibilities for the audit of the financial report

My objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.

As part of an audit in accordance with the Australian Auditing Standards, I exercise professional judgement and maintain professional scepticism throughout the audit. I also:

x Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion.

x The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

x Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. This is not done for the purpose of expressing an opinion on the effectiveness of the entity’s internal controls, but allows me to express an opinion on compliance with prescribed requirements.

x Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the entity.

x Conclude on the appropriateness of the entity's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the entity's ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify my opinion. I base my conclusions on the audit evidence obtained up to the date of my auditor’s report. However, future events or conditions may cause the entity to cease to continue as a going concern.

x Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation.

Queensland

Audit Office

Better public services

I communicate with the Board regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.

From the matters communicated with the Board, I determine those matters that were of most significance in the audit of the financial report of the current period and are therefore the key audit matters. I describe these matters in my auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, I determine that a matter should not be communicated in my report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on other legal and regulatory requirements Statement

In accordance with s.40 of the Auditor-General Act 2009, for the year ended 30 June 2022:

a. I received all the information and explanations I required.

b. I consider that, the prescribed requirements in relation to the establishment and keeping of accounts were complied with in all material respects.

Prescribed requirements scope

The prescribed requirements for the establishment and keeping of accounts are contained in the Financial Accountability Act 2009, any other Act and the Financial and Performance Management Standard 2019. The applicable requirements include those for keeping financial records that correctly record and explain the entity’s transactions and account balances to enable the preparation of a true and fair financial report.

David Toma

as delegate of the Auditor-General Queensland Audit Office Brisbane 18/08/2022

Townsville Hospital and Health Board

Remuneration

Position Name

Board

Finance

Chair Tony Mooney AM

Board

Finance

Deputy Chair Michelle Morton

Member Debra Burden

Member Christopher Castles

Member Luke Guazzo

Member Nicole Hayes

Member Danette Hocking

Member Professor Ajay Rane

PSM

Member Robert ‘Donald’

Member Georgina Whelan

$4,000 (as chair) $3,000 (as member) $112,000

$44,503 $4,000 (as chair) $3,000 (as member) $69,000

Board

Finance

Executive $44,503

$4,000 (as chair) $3,000 (as member) $69,000

and Risk

Board

Finance $44,503 $3,000 (as member) $54,000

Board

Finance

Board

Stakeholder Engagement

and Quality

Board

Board

Executive

Stakeholder

Board

Executive

Board

Finance

$44,503 $3,000 (as member) $17,000

$3,000 (as member) $56,000

$3,000 (as member) $56,000

$4,000 (as chair) $3,000 (as member) $60,000

$4,000 (as chair) $3,000 (as member) $60,000

$3,000 (as member) $65,000

GLOSSARY

AASB Australian Accounting Standards Board

ABF Activity-based Funding

ACHS Australian Council on Healthcare Standards

AICD Australian Institute of Company Directors

DHPW Department of Housing and Public Works

DoH Department of Health

FTE Full-time equivalent

HHS Hospital and Health Service

HSCE Health Service Chief Executive

JCU James Cook University

KMP Key Management Personnel

MOHRI Minimum Obligatory Human Resource Information is a whole-of- government methodology for reporting and monitoring the workforce

NAIDOC National Aborigines and Islanders Day Observance Committee

NDIS National Disability Insurance Scheme

OAM Medal of the Order of Australia

QGAO Queensland Government Accommodation Office

QGIF Queensland Government Insurance Funding

QLD Queensland

QWAU Queensland Weighted Activity Units

RHSG Rural Hospitals Service Group

SERTA Study Education and Research Trust Account

SSG Surgical Service Group

TAAHCL Tropical Australian Academic Health Centre Limited

TPHU Townsville Public Health Unit

TUH Townsville University Hospital

WAU Weighted Activity Units

COMPLIANCE CHECKLIST

Summary of requirement Basis for requirement Annual report reference

Letter of compliance

x A letter of compliance from the accountable officer or statutory body to the relevant Minister/s

x Table of contents

x Glossary

x Public availability

x Interpreter service statement

Accessibility

x Copyright notice

x Information Licensing

General information

Non-financial performance

Financial performance

x Introductory Information

x Government’s objectives for the community and whole-of-government plans/specific initiatives

x Agency objectives and performance indicators

x Agency service areas and service standards

x Summary of financial performance

x Organisational structure

x Executive management

Governance –management and structure

x Government bodies (statutory bodies and other entities)

x Public Sector Ethics

x Human Rights

x Queensland public service values

x Risk management

x Audit committee

Governance – risk management and accountability

x Internal audit

x External scrutiny

x Information systems and recordkeeping

x Information Security attestation

ARRs – section 7 Page 4

ARRs – section 9.1 Page 5 Page 88

ARRs – section 9.2 Page 2

Queensland Government Language Services Policy

ARRs – section 9.3 Page 2

Copyright Act 1968

ARRs – section 9.4 Page 2

QGEA – Information Licensing

ARRs – section 9.5 Page 2

ARRs – section 10 Page 6-8 Page 10-11

ARRs – section 11.1 Page 6,9

ARRs – section 11.2 Page 22-23

ARRs – section 11.3 Page 23-26

ARRs – section 12.1 Page 27-29

ARRs – section 13.1 Page 17-18

ARRs – section 13.2 Page 12-17

ARRs – section 13.3 Page 87

Public Sector Ethics Act 1994

ARRs – section 13.4 Page 21

Human Rights Act 2019

ARRs – section 13.5 Page 21

ARRs – section 13.6 Page 21

ARRs – section 14.1 Page 20

ARRs – section 14.2 Page 16

ARRs – section 14.3 Page 20

ARRs – section 14.4 Page 20-21

ARRs – section 14.5 Page 21

ARRs – section 14.6 Page 21

Summary of requirement Basis for requirement Annual report reference

x Strategic workforce planning and performance

Governance –human resources

x Early retirement, redundancy and retrenchment

x Statement advising publication of information

x Consultancies

Open Data

x Overseas travel

x Queensland Language Services Policy

x Certification of financial statements

Financial statements

x Independent Auditor’s Report

FAA Financial Accountability Act 2009

FPMS Financial and Performance Management Standard 2019

ARRs Annual report requirements for Queensland Government agencies

ARRs – section 15.1 Page 19

Directive 04/18 Early Retirement, Redundancy and Retrenchment

ARRs – section 15.2 Page 20

ARRs – section 16 Page 2

ARRs – section 31.1 https://data.qld.gov.au

ARRs – section 31.2 https://data.qld.gov.au

ARRs – section 31.3 https://data.qld.gov.au

FAA – section 62

FPMS – sections 38, 39 and 46

ARRs – section 17.1

FAA – section 62

Page 30-82

FPMS – section 46 ARRs – section 17.2 Page 83-86

Townsville